Questions RTX Executives Might Have About Their Compensation and Benefits

As an RTX (Raytheon Technologies and Collins Aerospace) executive, understanding the various compensation and benefits available is critical to making them work for you so you can reach your goals. Formerly employed with RTX, CCMI owner and Principal Kim Benson is familiar with the company’s incentive plans and regularly guides current and retired employees through specific details, required actions, and deadlines they should be aware of. This list provides questions and conversation starters you should consider if you have executive compensation, such as stocks, insurance, legal, and other benefits with RTX.

Should I Review My Deferred Compensation Plans?

There are two active deferred compensation plans RTX executives and level M7 employees can leverage to save for retirement: the RTX Compensation Deferral Plan and the Performance Share Units (PSU) Deferral Plan. Here is more information about these plans:

• Enrollment Period: June of the current year for the following year
• Deferral Options: There are three ways to defer your compensation, which you can consider based on your take-home pay and tax liability:
  • Salary Direct Deferral defers a portion of your salary starting with your first paycheck.
  • Salary Excess Deferral begins when you reach IRS compensation limits.
  • Bonus Deferral is something to consider if you are unsure about how the first two options would impact your cash flow. It is important to note if you anticipate reaching the IRS compensation limit of $350,000 upon payout of your bonus, you would want to elect the bonus deferral to maximize the RTX employer match. Currently, RTX matches up to 4% of your salary for up to 6% of your pay period contributions and has a separate age-based match that would also apply to your deferred compensation deferrals.

Do You Have a Legacy Compensation Plan with RTX?

Due to various mergers and acquisitions, you may have a legacy plan, such as a CACEP, UTC Deferred Comp Plan, etc. While you can no longer defer to these plans, if you have in the past, it’s important to discuss the following with your advisor for planning and tax purposes:

• What is the balance in each plan?
• How are the assets allocated?
• How will assets be distributed in the future?

CCMI can assist with navigating the website to find the answers to these questions and assist with recommendations and next steps.

How Can I Manage RTX Stock Options?

RTX awards different stock options within its Long-Term Incentive Plans (LTIP) based on executive grade levels, such as E1 through E5, including: 

• Restricted Stock Units (RSUs): Once vested, these shares are automatically deposited in your account; however, you can consider other actions for tax planning and concentration management, such as selling, holding, or diversifying.
• Stock Appreciation Rights (SARs): Recipients have 10 years to exercise options. If no action is taken, they will expire.
• Performance Share Units (PSUs): How many PSUs and when they are distributed are linked to the company achieving certain performance goals.

Vesting Schedule: As each of these awards vests after three years, consult an advisor to take appropriate actions and identify various risks and strategies, including:

• Concentration Risk: To minimize concentration risk, review how much RTX stock you hold collectively in stock awards, your 401(k), and deferred compensation accounts. We recommend a 10% or 15% percentage relative to your total portfolio assets. 
• Taxes: There are many considerations that impact taxes when it comes to stock awards.  For example, when RSUs vest, the company withholds shares for taxes; however, more tax withholdings are usually required. There are additional taxes once RSUs are sold depending on the gain/loss status.

How Do I Maximize the RTX 401(k) & Health Savings Accounts Plans?

If you participate in the RTX Saving Plan, its 401(k) option, consider the following in case you need to make plan changes and to ensure you’re making the most of this valuable benefit:

• 401(k) Contributions: If you are not currently maximizing 401(k) contributions, consider increasing to a point that does not strain your cash flow. Maximize 401(k) contributions by contributing up to $23,500 if you are under age 50 or up to $31,000 if you are 50 or older (2025 limits). Additionally, you can contribute even more if you are between ages 61–63. 
• Mega Backdoor Roth: Consider maximizing your after-tax contributions using a Mega Backdoor Roth, which we explain in this blog post. As a high-income earner, your income likely exceeds the Roth IRA income limits, making you ineligible for Roth IRA contributions. In 2025, you are no longer eligible to contribute to a Roth IRA if you earn more than $165,000 as a single filer and $246,000 as a married couple. You can use this significant benefit to boost retirement savings, especially if you have excess cash and are already maximizing the $23,500 employee contribution amount if you are under age 50 and $31,000 if you are age 50+.
• Health Savings Accounts (HSAs) Contributions: Consider maximizing your contributions and paying out of pocket for medical expenses so your savings are invested for long-term growth. 
  • Tax Advantages: Contributions to an HSA are pre-tax and lower your taxable income. Additionally, unused HSA funds will continue to grow tax-free year after year and may be used for qualified expenses now and in retirement tax-free. After age 65, you can use the funds for anything but you will lose out on some of the tax savings HSAs provide if they are not used for qualified medical expenses.
  • Employer Match: RTX will also contribute to your HSA based on your selected plan. Keep in mind employer contributions count toward your annual family contribution maximum. If you and a spouse have an HSA, ensure you stay within the yearly family limits ($8,550 for you plus one or more dependents plus a $1,000 catch-up contribution for those over age 55, in 2025) to avoid over-contributing and facing potential penalties or tax liabilities.
• Asset Allocation: Ensure your allocations are aligned with your current goals, retirement date, and income. If the company’s stock performance or your financial circumstances change, you may consider adjusting your allocation. To facilitate this, RTX offers low-cost, diversified options to help you strike an appropriate balance and choose the right mix.
  • Remember that an early separation or retirement could affect certain benefits. Consult your plan administrator or advisor to learn more.
  • There is a new option allowing quarterly diversification of the employer match that currently goes to RTX stock. This option is ideal especially for those who have a high concentration (>15%) in RTX stock.
• Roth Conversion: If you have after-tax money in your 401(k), you can consider converting the after-tax portion to a Roth IRA. You will pay taxes on the earnings upon the conversion but earnings grow tax-free from that point forward. While savings grow tax-free, earnings are tax-deferred unless they are converted. Consult your advisor or a tax professional to understand your tax liability due at the time of conversion and CCMI can guide you with step by step instructions.
• RTX Lifetime Income Strategy (LIS) for 401(k)s: This option provides guaranteed income within a 401(k) at an additional cost. Consult an advisor to determine if the LIS benefits your situation, as it includes additional costs and precludes people from doing an NUA. Learn more about the LIS in this blog post.
• Net Unrealized Appreciation (NUA): For RTX (Raytheon) employees who have recently left the company or are no longer employed, NUA presents a unique opportunity. If you’ve yet to roll over your 401(k) into an IRA, have low-cost basis stock in your plan, or have met another qualifying event, you should consider this strategy. NUA transfers company stock “in-kind” to a non-retirement brokerage account in the same year you roll your 401(k) to an IRA account, unlocking potential tax benefits and more flexibility. 

How Can I Leverage Insurance Coverage and Other Benefits?

As a busy professional, it can be easy to miss opportunities or the full extent of benefits available to you, such as:

• Long-Term Disability: Executives can enroll in additional long-term disability insurance coverage at an extra cost. While the goal is to cover at least 60% of income after taxes, executive income often far exceeds the baseline policies’ limits, so it is worth considering extra coverage.  
• Group Legal Insurance: Consider RTX’s legal plan options for cost-efficient advice for tasks such as drafting estate planning documents like a will, trust, and power of attorney, and representation for estate planning purposes, real estate matters, tax audits, and more. Keep in mind, you must select from a list of attorneys operating under this plan.

Navigating RTX Compensation & Benefits: How CCMI Helps

When navigating your RTX compensation and benefits, there are many details and strategies to consider that may feel daunting as an employee. We’re here to help simplify the process so you can maximize your benefits.

With past employment experience and continued work helping RTX (Raytheon) employees plan for retirement, CCMI provides specialized expertise and personalized guidance to help employees assess their individual circumstances and specific plan benefits. Here’s how we can help:

• Portal Guidance: RTX has several different platforms, such as the Newport Group and UBS One Source for stocks and Alight or Workday for other information, which can add more confusion when managing benefits. Kim often guides clients through these various resources, connecting remotely, sharing screens, and answering questions to streamline decision-making. 
• Benefits Administration: We are also happy to call the dedicated RTX benefits line with you to address your questions and implement necessary changes.
• Latest IRS Rules: We stay current on IRS rules and changes so you don’t have to, helping to ensure you’re maximizing your benefits and considering various tax treatments and strategies.
• Real time updates: As CCMI works with clients employed by RTX around the country, we also receive real-time RTX changes and updates on a regular basis to allow us to stay on top of changes from the company.

If you’re an RTX employee, we encourage you to contact our team to learn more about how we can support you on your financial plan or view RTX articles in our blog. Be sure to ask us about our free planning templates to help make integrative decision-making even more manageable, considering all your options.