Maximizing Your RTX Benefits

If you’re a high-earning RTX executive, you may have company benefits and equity compensation that add a layer of complexity to your finances. Knowing how and when to use your benefits can make a significant difference in your retirement, cash flow, and future. Here are key steps you can take to help maximize your benefits, increase positive financial outcomes, and manage your tax liability.

Maximize Retirement Plan Contributions

Here are a few ways you can take full advantage of your 401(k) and retirement plans:

• Max Out Contributions and Reduce Taxable Income:
  • RTX Savings Plan – 401(k): If you have stable or excess income, you can contribute up to $23,500 if you are under age 50 or up to $31,000 if you are 50 or older (2025 limits). You can contribute up to $34,750 if you are between 60 and 63 in the 2025 calendar year. At a minimum, consider contributing enough to qualify for the RTX employer match.
  • Health Savings Accounts: Consider maxing out your contributions and paying out of pocket for medical expenses, allowing your savings to be invested for long-term growth. Contributions are pre-taxed, lower your taxable income, grow tax-free year after year, and may be used for qualified expenses now and in retirement tax-free. RTX also provides a match to your HSA based on your selected plan.
• Mega Backdoor Roth: This strategy enables employees to save beyond the standard 401(k) contribution limits within their RTX Savings plan.  Once the annual contribution limits are reached, any further contributions are automatically made on an after-tax basis. While after-tax contributions do not reduce your current taxable income, after conversion, future growth is tax-free, and Roth accounts are not subject to Required Minimum Distributions (RMDs). Keep in mind, you will pay taxes on any growth when you convert after-tax contributions to a Roth IRA; however, once the funds have been converted to a Roth account, you will enjoy tax-free growth afterward. 
• Roth Conversion: If you have after-tax money in your 401(k), it will be identified as such on your statement. Consider converting the after-tax portion to a Roth IRA. This is one of the key steps in the Mega Backdoor Roth strategy that often gets overlooked.   You will pay taxes on the earnings upon the conversion, but the funds 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.
  • Auto-Convert After-Tax Contributions to Roth: Elect to have all future after-tax contributions converted to Roth automatically with every paycheck. This election is something that needs to be “turned on” and will remain in effect until you turn it off or separate from employment. Please note that a portion of your conversion, whether done manually or automatically, will be taxable. Please note, if you have a large after-tax balance in your 401(k), consult with your advisor before turning on this feature, as it can create a large tax liability if converted all at once.

Strategically Manage RTX Stock

There are various considerations when managing your company stock, including:

• Restricted Stock Units (RSUs): Once vested, these shares are automatically deposited in your account; however, you may consider selling, holding, or diversifying actions for tax planning and concentration management.
• Stock Appreciation Rights (SARs): Recipients have 10 years to exercise options, at which point they will expire.
• Performance Share Units (PSUs): The number of PSUs and their distribution are tied to the company achieving specific 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: Consider the tax impacts of your 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.

Identify Tax Opportunities

Here are some of the actions you can consider to manage your tax liability more efficiently:

• Review Your Tax Withholdings: If you had a tax surprise earlier this year, you probably under-withheld, potentially even resulting in a penalty. On the other hand, if you received a large refund, you could have put your excess income to work more efficiently, for example, toward investing or paying down debt. To help avoid penalties and improve your cash flow, consider adjusting your federal and state income tax withholdings to “break even” or receive a small refund.
• Tax-Loss Harvesting: This strategy involves selling a security that has declined in value, which realizes the loss for tax purposes, with the potential to diversify or reset your cost basis in a similar holding. Incurring losses through tax-loss harvesting enables you to cover current tax liability by offsetting capital gains and some taxable income. To maintain your portfolio’s allocations, exposure, and holdings, immediately purchase another security comparable to the sold asset, essentially resetting the cost-basis with the replacement investment. Be aware of wash sale rules, which can disallow a tax deduction.  Always consult with an advisor before implementing tax loss harvesting.
• Gift Appreciated Stock: If the stock value rises and you’re inclined to give to charity, you can donate shares. This is a win-win strategy in which a charity receives a tax-free contribution, and you eliminate the taxable gain from selling the stock instead. You could also use appreciated stock to fund a donor-advised fund if that is the right option for you.
• Deferred Compensation: Consider participating in the deferred compensation programs if you are eligible. This gives high earners the option to shift income from high-tax years to retirement when they no longer have earned income, while potentially maximizing their employer match. 

Maximize Your RTX Benefits: How CCMI Can Help

With past employment experience and continued work helping RTX employees, CCMI speaks RTX’s language. Our clients have shared the confidence and peace of mind they feel when having a safe space to navigate the intricacies of their plans — from benefits to key timelines — with a team that understands the details firsthand. 

As we approach the end of the year, it’s an excellent time to review what worked last year and what needs improvement, identify changes for next year, and discuss key questions with your financial advisor and CPA.

View RTX articles in our blog or contact our team to learn how we can help you make more integrative, informed decisions for the year ahead