For Boeing Employees in O’Fallon, Shiloh, Edwardsville, Belleville, and the Metro East Illinois Area
By Andy Branz | Sr. Wealth Advisor, Clark Wealth Partners, O’Fallon, IL
If you work for Boeing, you have access to a highly competitive 401(k) plan compared to many large employers. The Boeing 401(k) Retirement Plan, formerly known as the Voluntary Investment Plan or VIP before it was renamed in January 2022, offers a combination of matching contributions, immediate vesting, and advanced savings tools that may compare favorably to those offered by many employers.
The problem is that most Boeing employees don’t fully use it. They contribute enough to get the match, pick a target-date fund, and move on. That’s not a bad start, but it may result in missed retirement savings opportunities, and it leaves important decisions unmade.
This article walks through how the Boeing 401(k) works, what the most impactful decisions are, and how Illinois residents have a specific tax advantage worth understanding before making contribution choices. We also explain how the 401(k) fits alongside Boeing’s pension plans (the BCERP and PVP), the Supplemental Savings Plan (SSP), and the Mega Backdoor Roth, all of which we’ll cover in detail in separate articles.
What Is the Boeing 401(k) and Who Is Eligible?
The Boeing Company 401(k) Retirement Plan is a defined contribution retirement savings plan administered through Fidelity Investments (Boeing moved all retirement plan administration to Fidelity in January 2022). It is available to nonunion employees and to employees represented by unions that participate in the plan, as long as you are paid directly through Boeing’s U.S. payroll and not on layoff or unpaid leave.
Unlike Boeing’s defined benefit pension plans (the BCERP for union employees and the PVP for non-union employees, both of which are frozen and no longer accepting new participants), the 401(k) is the primary retirement savings vehicle for virtually all active Boeing employees today. New hires do not have access to a pension; the 401(k), with Boeing’s contributions, is the foundation of their retirement.
The Match: Boeing’s Most Underappreciated Benefit
The Boeing 401(k) match is genuinely exceptional, and understanding it completely is the first step to using the plan well.
For non-union employees:
Boeing matches your contributions dollar-for-dollar on the first 10% of eligible base pay and incentive pay that you contribute. Contribute 10% of your salary, and Boeing puts in another 10%. That’s an immediate 100% return on the first dollar, before any investment growth, which is a comparatively strong matching structure among many large employers.
For IAM-represented union employees:
Following the IAM contract ratified in November 2024, Boeing matches 100% of contributions up to 8% of salary, plus an automatic 4% company contribution regardless of what you contribute. That’s a total potential company contribution of 12% of salary annually, a significant improvement over prior contract terms.
Critically, both groups benefit from immediate 100% vesting on all company contributions. From the first day Boeing puts money into your account, it’s yours. There is no waiting period, no cliff vesting, no gradual schedule. This is unusual and genuinely valuable. It means even employees who leave Boeing early keep everything the company contributed.
2025 Contribution Limits: What You Can Put In
The IRS sets annual limits on how much you can contribute to a 401(k). For 2025, the key limits are:
- Standard elective deferral limit: $23,500 (applies to all pretax and Roth contributions combined)
- Catch-up contribution (age 50 or older): an additional $7,500, for a total of $31,000
- Super catch-up (ages 60–63): a higher catch-up of $11,250 instead of $7,500, effective in 2025 under the SECURE 2.0 Act
- Annual additions limit (all contributions combined, including Boeing’s match): $70,000, or $77,500 if you’re 50 or older
The annual additions limit is the key figure if you’re trying to maximize everything available. It represents the total of your pretax, Roth, after-tax, and Boeing’s contributions combined. This is important because Boeing’s match counts toward that cap, and for high earners contributing 10% with Boeing matching 10%, the combined total can approach or reach the annual limit before year-end.
For employees who want to save beyond these limits, Boeing offers two additional tools: the Supplemental Savings Plan (SSP) and the Mega Backdoor Roth. We cover both in separate articles.
Pretax, Roth, or After-Tax: Choosing the Right Contribution Type
The Boeing 401(k) allows you to contribute on a pretax, Roth, or after-tax basis, or any combination of the three. This flexibility is a genuine advantage, but it requires a decision most employees make without enough information.
Pretax Contributions
Pretax contributions reduce your taxable income today. You pay tax when you withdraw the money in retirement. This is the traditional 401(k) approach, and it makes the most sense when you expect to be in a lower tax bracket in retirement than you are today.
Roth Contributions
Roth contributions are made with after-tax dollars. The money grows tax-free, and qualified withdrawals in retirement are completely tax-free, including all the growth. This makes the most sense when you expect to be in the same or a higher tax bracket in retirement, or when you want tax diversification across your portfolio.
The Illinois Angle on This Decision
Illinois does not tax retirement income, including 401(k) and IRA distributions. This changes the math for Boeing employees in the Metro East area in an important way.
When comparing pretax vs. Roth, one of the key variables is the state tax you’ll pay on withdrawals. In most states, that’s a real cost. In Illinois, it’s zero. That means the federal tax comparison is the only one that matters for Illinois residents, which simplifies the analysis and may make pretax contributions more attractive for certain Illinois residents, depending on their financial situation and expected future tax circumstances.
However, Roth contributions still have real value in Illinois for two reasons. First, they create tax-free income that doesn’t count toward the thresholds that can trigger taxation of Social Security benefits at the federal level. Second, if future federal tax rates increase, which is a genuine long-term risk given current deficit projections, Roth balances are fully insulated.
Many Boeing employees may benefit from evaluating a combination of pretax contributions to reduce current federal taxable income, with a portion going to Roth for tax diversification. The exact split depends on your income, your bracket, your pension income in retirement, and your Social Security strategy.
Investment Options Inside the Boeing 401(k)
Boeing’s 401(k) offers a well-designed menu of investment options that covers the major asset classes. The categories include:
- Target-date (Lifecycle) funds: Diversified funds that automatically shift from growth to income as you approach a target retirement year. These are the default for most participants and a perfectly reasonable choice for employees who don’t want to manage their own allocation.
- Index funds: Low-cost, passively managed funds that track major market indexes. For most long-term investors, these are an efficient way to capture market returns without paying for active management.
- Actively managed funds: Funds managed by professional investment teams that attempt to outperform their benchmarks. These carry higher fees and have a mixed track record versus index funds over the long term.
- Boeing Company Stock Fund: Allows you to invest in Boeing stock directly within your 401(k). We’d caution against putting too much here. Your income and benefits are already tied to Boeing’s financial health. Concentrating your retirement savings there too creates significant concentration risk.
For most Boeing employees, a combination of low-cost index funds diversified across U.S. equities, international equities, and fixed income, aligned with your risk tolerance and time horizon, is a commonly used diversified long-term investing approach. The exact allocation depends on your age, your pension income (if any), your other assets, and your goals.
The Student Loan Match: A Newer Benefit Worth Knowing
Boeing added a student loan match feature that allows eligible employees to count qualified student loan payments toward their 401(k) match eligibility. In other words, if you’re paying down student debt and can’t afford to contribute much to your 401(k), Boeing will still provide a matching contribution based on your loan payments.
This is a meaningful benefit for younger employees earlier in their careers who are managing student debt while trying to build retirement savings. If this applies to you, make sure you’re enrolled and that your loan payments are being counted — it’s an easy benefit to miss.
How the 401(k) Fits with Your Pension and Other Boeing Benefits
For Boeing employees who were hired before the pension freezes, the 401(k) doesn’t exist in isolation. It sits alongside either the BCERP (for union-represented employees) or the Pension Value Plan (PVP, for non-union salaried employees). Understanding how these work together is essential to building a coherent retirement income plan.
If your BCERP or PVP pension will provide a meaningful guaranteed income floor in retirement, your 401(k) can be managed more aggressively for growth, since you don’t need it to generate day-one income. If your pension benefit is modest, or if you’re a newer employee without pension access, your 401(k) needs to do more of the heavy lifting, which may change your investment allocation and withdrawal strategy.
The interaction between your 401(k) and pension also matters for tax planning. Pension income (from the BCERP or PVP) is taxable at the federal level but exempt in Illinois. 401(k) distributions from a traditional account are also federally taxable but exempt in Illinois. Understanding how these income streams stack up in total, including how they interact with Social Security and RMDs starting at age 73, is the core of retirement income planning for Boeing employees.
Common Mistakes Boeing Employees Make with Their 401(k)
Not contributing enough to get the full match.
This is the most costly mistake. If you’re not contributing at least 10% of your salary (non-union) or 8% (IAM union), you’re leaving company money behind every pay period.
Picking a target-date fund and never reviewing it.
Target-date funds are a reasonable default, but they’re designed for the average investor. If you have significant pension income, real estate, or other assets, your 401(k) allocation should reflect your complete financial picture — not just your age.
Overloading on Boeing stock.
Your financial wellbeing is already highly correlated with Boeing’s health — your paycheck, your benefits, your pension. Concentrating your 401(k) in Boeing stock compounds that risk.
Not revisiting contribution type as income changes.
The pretax vs. Roth decision isn’t permanent. As your income, tax bracket, and retirement horizon change, so does the optimal mix. Review it at least every few years.
Missing the SSP and Mega Backdoor Roth.
High earners who have maxed out their standard 401(k) contributions have additional options inside the Boeing ecosystem. These tools are powerful but require active enrollment decisions. We cover them in dedicated articles.
When to Talk to an Independent Advisor About Your Boeing 401(k)
For many Boeing employees, the 401(k) decisions about how much to contribute, in what form, invested how, and coordinated with what other income sources are decisions worth reviewing with an independent financial advisor at least every few years, and certainly as you approach retirement.
Fidelity provides access to Financial Engines advisors through the Boeing plan, and that’s a reasonable resource for basic allocation guidance. But for more complex questions, such as coordinating your 401(k) with a pension lump-sum decision, running Roth conversion scenarios, or optimizing your withdrawal sequence in retirement, an independent RIA who works with Boeing employees regularly may provide more personalized guidance.
At Clark Wealth Partners, we are an independent registered investment adviser serving Boeing employees and retirees in the O’Fallon, Shiloh, Edwardsville, and Belleville area. As fiduciaries, we are legally obligated to act in our clients’ best interests. We do not receive commissions for investment advisory recommendations, and have no financial incentive to recommend one option over another.
Ready to Review Your Boeing 401(k) Strategy?
Whether you’re early in your career and trying to build the right savings habit, mid-career and wondering if you’re on track, or within five years of retirement and looking to optimize, a clear-eyed review of your Boeing 401(k) strategy can be an important retirement planning conversation.
We offer a complimentary consultation for Boeing employees and retirees in the Metro East area. We’ll review how your 401(k) fits into your complete financial picture, identify any opportunities you may be missing, and help you make informed decisions about the tools available to you.
Visit us at clarkwealthpartners.com/boeing to learn more or schedule your consultation.
Disclosures
Clark Wealth Partners is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. This material is provided for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. All investments involve risk, including possible loss of principal. Past performance is not indicative of future results. Boeing is not affiliated with or endorsing Clark Wealth Partners.
Tax considerations discussed are general in nature and may not apply to all individuals. Consult your tax adviser regarding your specific situation.