Choose How to Save

There are three ways to save toward your retirement in the plan. Here’s a closer look at how they compare:

FeaturesPre-taxRoth*After-Tax
Type of SavingsSavings are deducted before taxes are taken from your pay, which reduces your current taxable income.Savings are deducted after taxes are
taken from your pay.
Contribution Limits**You can save up to 100% of your eligible compensation, up to the annual IRS maximum. For 2016, the combined maximum for pre-tax and Roth contributions for US based employees is $18,000.You can save from 1% to 100% of your eligible compensation. Puerto Rico based employees are limited to 1% to 10% of your eligible compensation.
Catch-Up Contributions**If you are 50 or older by the end of the year, you can save an additional amount — $6,000 in 2016 — in catch-up contributions. Puerto Rico based employees are limited to $1,500 year.There are no catch-up contributions.
TaxesYou pay taxes on all distributions you receive from the plan.You pay taxes when you make contributions. Earnings are not taxed if you receive a qualified distribution (i.e., at least five years after your first Roth contribution and after you reach age 59½, become disabled or die).You pay taxes when you make contributions. When you receive a distribution, you are taxed only on earnings.
Access To Your Account While an Active EmployeeYou have limited access to your contributions.You may access your contributions at any time, without restrictions.

*Roth contributions are not available for Puerto Rico-based employees
**The federal government sets contribution limits annually. The 2016 limits for employees in Puerto Rico are $18,000 on a pre-tax basis and $1,500 as a catch-up contribution.

Roll Over More Savings

You may also roll over an account from most other qualified retirement plans. You may find it easier to manage your finances when everything is in one spot. Simply complete a Rollover Contribution Form, available on the NetBenefits website under Plan Information and Documents.

Change Your Savings Anytime

You can change the amount you save anytime through the NetBenefits website or by calling the American Airlines 401(k) Service Center at Fidelity at (800) 354-3412.

Keep the Increases Coming

Even small increases in your contributions can increase your total savings significantly. Plus, small increases have a relatively painless effect on your paycheck.

Take advantage of the Annual Increase Program that allows you to increase your contribution amount by a certain percent each year on a date of your choosing. Signup on the NetBenefits website under Contribution Amount.

Here’s an example of how much your long-term savings could improve by increasing your contributions by 1% or 2%:

If You Contribute an Additional:Total Additional Savings
After 5 Years
Total Additional Savings
After 15 Years
Total Additional Savings
After 25 Years
1% of Eligible Compensation
(an extra $33.33/month)
 
$2,400
 
$10,600
 
$27,000
2% of Eligible Compensation
(an extra $66.66/month)
 
$4,800
 
$21,100
 
$54,000

This example assumes:

  • You earn $40,000 a year.
  • Contributions are made at the end of each month.
  • Your account earns a 7% rate of return, compounded monthly, which is reinvested.

The example is for illustration purposes only and doesn’t represent a particular investment product. This information is for education only and is not meant to provide tax or investment advice.

Get a Boost from American with Company Contributions

Contributions for Non-Contract and Ground Employees

Check Out Company Matching Contributions

When you have one year of eligibility service, American begins matching 100% of your pre-tax and/or Roth savings up to 5.5% of eligible compensation. After-tax and catch-up contributions do not qualify for company matching contributions.

Go for the Full Match

If you have at least one year of eligibility service, you should be sure to save at least an average of 5.5% on a pre-tax and/or Roth basis. If you save less, the company matches less and your retirement savings will not grow as quickly as they could.

If you’re contributing less than an average of 5.5% then consider increasing your contribution. Go to the NetBenefits website and click on Contribution Amount. You can make changes to your contribution rate at any time.

Contributions for Flight Attendants

After completing one year of service, Flight Attendants (not on the 4/12/2012 American Airlines systems seniority list) will receive 3% company contribution plus American will begin matching 100% of your pre-tax and/or Roth savings, up to 2.5% of eligible compensation. After-tax and catch-up contributions do not qualify for company matching contributions.

Flight Attendants on the 4/12/2012 American Airlines systems seniority list receive an age-based company contribution*. Here is how it works:

  • Under age 40 receive 5.5% of eligible compensation
  • Age 40 to 49 receive 6.75% of eligible compensation;
  • Age 50 plus 9.9% of eligible compenstaion

*This is effective until 12/31/2018.

Own It

You are always 100% vested in — you own — your contributions and any earnings.

You are 100% vested in company contributions after completing two years of service or when you reach age 65, if earlier. (The one-year wait for company matching contributions counts toward the two-year vesting requirement.) This means if you leave American before you have two years of vesting service, you are not eligible for any company contributions.