American Airlines wants to invest in you and your future.  Your American Airlines 401(k) plan makes it easy to get started, and to save throughout your career.  It’s never too early, or too late, to plan for retirement.

 

The earlier you start saving in your 401(k) account, the more you can take advantage of compounding.  This means that over time, your investments can generate earnings and those earnings can generate even more earnings.  It’s a powerful way to grow your savings.

Get Started

  • If you’re an eligible regular full-time or part-time team member on the U.S. payroll (including Puerto Rico and the U.S. Virgin Islands), you’re eligible to start saving immediately in the plan.
  • If you don’t take action within your first 30 days of employment, you’ll be automatically enrolled (if eligible) to save on a pre-tax (aka before tax) basis.
  • You may change your contribution amount and investments at any time through the Fidelity NetBenefits® website, and get assistance by calling the American Airlines 401(k) Service Center at Fidelity at 800-354-3412.

Develop Your Strategy

Your American Airlines 401(k) plan offers a wide array of options for you to customize your 401(k) account with your retirement goals in mind.  There is an assortment of contribution types and a range of investment options offered to help you meet those goals.  With access to online resources and one-on-one consultations, you have the help you need to decide how much to contribute, which account type fits your goals, and how to invest your account balance.

You can manage your plan anytime, anywhere. Log onto the Fidelity NetBenefits® website to make changes to your contribution elections, adjust your investment elections, and monitor your portfolio’s performance. Or, you can call the American Airlines 401(k) Service Center at Fidelity at 800-354-3412.  Dedicated representatives are available to assist you Monday through Friday, 8:30 a.m. until midnight (ET) .

How much should I contribute?

One of the most important decisions you make in your 401(k) plan is how much you contribute.  Through automatic payroll deductions, you can contribute up to 100% of your eligible compensation to your 401(k) account, up to the annual IRS maximums.  If you will be age 50 or older by December 31st of the current year, you can save an additional amount with Catch-up contributions.

Even small increases in your contributions can increase your total savings significantly.  You can take action to increase your contribution elections at any time, by as little as half-percent increments (0.5% increments).  You can also take advantage of the Annual Increase Program that automatically increases your contributions each year on a recurring basis.  You can sign up for the Annual Increase Program on the Fidelity NetBenefits® website under the Contribution Amount section.

Once you’re enrolled in the 401(k) plan, check out the Contribution Calculator or visit the Planning & Guidance Center to find tools and resources you need to help you manage your retirement savings.

Which Contribution Option is right for me?

Your American Airlines 401(k) plan offers three contribution election options to help you save for your retirement.  You may contribute up to 100% of your eligible compensation as Pre-Tax deductions or on an after-tax basis through Roth 401(k) and/or After-Tax deductions.

Pre-Tax

Contributions are made before income taxes are taken from your pay.  You will pay taxes on all distributions you receive from the plan.

You have limited access to your Pre-Tax contributions while you are an active team member and penalty taxes for early withdrawals may apply.

Roth 401(k)

Contributions are deducted after income taxes are taken from your pay.  Although your Roth 401(k) contributions are deducted after taxes are taken from your pay, the amount of the contribution is calculated based on your gross eligible compensation.

Roth 401(k) contributions allow you to make after-tax contributions and take any associated earnings potentially tax free at retirement – as long as the distribution is taken at least five tax years after your first Roth  401(k) contribution and after you have reached age 59 ½, become Social Security disabled, or die.

You have limited access to your Roth 401(k) contributions while you are an active team member and penalty taxes for early withdrawals may apply.

After-Tax

Contributions are deducted after income taxes are taken from your pay.  Although your After-Tax contributions are deducted after taxes are taken from your pay, the amount of the contribution is calculated based on your gross eligible compensation.

You may access your After-Tax contributions at any time, without restrictions.  Since you pay taxes when you make After-Tax contributions, when you receive a distribution, you are taxed only on the associated earnings.  If you are under age 59 ½, a penalty tax may apply.

 

Is there a limit on how much I can contribute?

Every year the IRS sets limits to the amount of contributions that can be made into a 401(k) plan.  Below are the contribution limits for 2018.

2018 Limits for U.S.-based team members

Elective Deferral Contributions — $18,500

Catch-up Contributions* — $6,000

Total Contributions — $55,000

Total Contributions with Catch-up — $61,000

Maximum Eligible Compensation — $275,000

Your combined total contribution rate amongst the contribution election options cannot exceed 100%.

*You may contribute to Catch-up contributions if you will be age 50 or older by December 31st of the current year.  Puerto Rico-based team members are limited to $1,500 per year in Pre-Tax Catch-up contributions, and $55,500 in Total Contributions with Catch-up.

What Are My Investment Options?

Your American Airlines 401(k) plan investment menu consists of four tiers, each focused on a different style of investing.  Because your investment preferences are as individual as you are, the tiers allow you to easily identify the differences between the options and choose those that fit you best.  Whether you’re a hands-off investor or hands-on investor, the 401(k) plan investment menu has custom fund options to help you achieve your retirement goals.

For hands-on investors, you can develop a personalized investment strategy on your own or with help of tools available on the Fidelity NetBenefits® website.  At no additional cost, you can take advantage of one-in-one consultations by contacting Fidelity at 800-603-4015 or by visiting the Planning & Guidance Center to help you identify an asset mix that aligns with your goals.

Tier 1:  Target Date Funds

These funds give you a diversified, all-in-one mix of stocks, bonds, short-term investments, and other investment options found individually in Tiers 2 and 3.  Each fund is a custom mix, specifically designed just for team members of American Airlines.  You choose the fund based on the year closest to the date you expect to retire, and over time, the fund adjusts to grow more conservative as it reaches its target date.

Tier 2:  Index Funds

These funds are clearly labeled by asset class and are designed to track the structure and performance of their associated market index.

Tier 3:  Actively Managed Funds

These funds are clearly labeled by asset class and try to outperform – or beat – the returns of their associated market index like the S&P 500.

Tier 4:  Self-directed Brokerage Account

Fidelity BrokerageLink® is an account with the 401(k) plan that gives you access to thousands of mutual funds and other investment options beyond those offered in Tiers 1, 2, and 3.

Plus professional management for your 401(k) plan account

If you are a hands-off investor, you can hand your investments over to professionals from Financial Engines, an independent investment advice and management service provider.  Through Financial Engines’ Professional Management program, you get a portfolio based on your situation and goals, with the balance of risk and reward that’s right for you.  Your investments are adjusted as needed to reflect changes in the market and in your life.  This service is available for a fee.

You can select your mix of investment options or make changes at any time by logging on to your 401(k) account at Fidelity NetBenefits® website or speak with an American Airlines 401(k) Service Center at Fidelity representative at 800-354-3412.  Dedicated representatives are available to assist you Monday through Friday, 8:30 a.m. until midnight (ET).

 

Can I rollover a balance?

You may also roll over a balance from another qualified retirement account, such as an IRA or a previous employer’s plan account.  You may find it easier to manage your finances when everything is in one spot.  Simply complete a Rollover Form, available on the Fidelity NetBenefits® website under the Forms link in the Plan Information section.

For further details speak with an American Airlines 401(k) Service Center at Fidelity representative at 800-354-3412.  Dedicated representatives are available to assist you Monday through Friday, 8:30 a.m. until midnight (ET).

Investing in You and Your Future

After one year of service American will provide you with an employer contribution to your 401(k) account.  The amount contributed will depend on your workgroup.

Team members with prior service or who transfer to American from one of its wholly owned subsidiaries will have their prior service at the subsidiary credited towards the one year eligibility requirement and towards the service requirement for vesting – full ownership of your 401(k) account balance.

American will contribute 16% of your eligible compensation to your 401(k) account up to the IRS limits.  Participation is automatic, and you will be eligible for this company contribution after completing one year of service.

If you do not have an investment election on file, your company contributions will be made to the Target Date Fund closest to the year you will turn age 65.

You are always 100% vested in your contributions, the company contributions, and any associated earnings.

Flight Attendants generally receive company contributions plus are eligible to receive company matching contributions.  In addition to a 3% company contribution, American provides 100% company matching contributions on your Pre-Tax and/or Roth 401(k) contributions up to 2.5% of your eligible compensation.  So every dollar you contribute* up to 2.5% gets matched by American, dollar for dollar.

Participation in the 3% company contribution is automatic after you complete one year of service.  However, if you contribute less than 2.5% on a Pre-Tax and/or Roth 401(k) basis you could be passing up on free money.

Flight Attendants that were on the American Airlines System Seniority List for Flight Attendant Employees as of April 12, 2012, receive an age-based company contribution.  This company contribution remains in effect until December 31, 2018.

Under age 40: 5.5% of eligible compensation

Age 40 to 49: 6.75% of eligible compensation

Age 50 and older: 9.9% of eligible compensation

Flight Attendants eligible for the age-based company contribution receive this contribution in place of the 3% company contribution plus 2.5% company matching contributions.

As of January 1, 2019, all Flight Attendants with at least one year of service will receive the 3% company contribution plus 2.5% company matching contributions to their 401(k) accounts.

If you do not have an investment election on file, your contributions along with company contributions and company matching contributions will be made to the Target Date Fund closest to the year you turn age 65.

You are always 100% vested in your contributions and earnings on those contributions.  You become 100% vested in your company contributions and company matching contributions (plus their associated earnings) generally upon completing two years of service or reaching age 65, if earlier.  Once vested, the employer contributions are yours to keep.  However, if you leave American before you have two years of service, you will forfeit all employer contributions and their associated earnings.

*After-Tax and Catch-up contributions do not qualify for company matching contributions.

Your American Airlines 401(k) plan generally provides 100% company matching contributions on your Pre-Tax and/or Roth 401(k) contributions up to 5.5% of eligible compensation.  So every dollar that you contribute* up to 5.5% gets matched by American, dollar for dollar.

Make sure that you are contributing at least 5.5% in Pre-Tax and/or Roth 401(k) contributions as early as possible.  Not only will you jump start your savings, but once you have satisfied one year of service, you won’t be leaving any free money behind.

If you do not have an investment election on file, your contributions and company matching contributions, once eligible, will be made to the Target Date Fund closest to the year you turn 65.

You are always 100% vested in your contributions and earnings on those contributions.  You become 100% vested in your company matching contributions (plus their associated earnings) upon completing two years of service or reaching age 65, if earlier.  Once vested, the company matching contributions and their associated earnings are yours to keep.  However, if you leave American before you have two years of service, you will forfeit all company matching contributions and their associated earnings in the 401(k) plan.

*After-Tax and Catch-up contributions do not qualify for company matching contributions.

Note: Some Mechanics and Fleet Service team members participate in the IAM Multiemployer Pension Plan, as prescribed in their current collectively bargained agreements.  We encourage all team members to contribute to their 401(k) accounts, even if they do not receive an employer contribution to the 401(k) plan.

Access Your Savings

Your American Airlines 401(k) plan is designed to provide funds for your retirement and is regulated by Federal tax law.  As a result, there are certain restrictions for borrowing or withdrawing money from the 401(k) plan, particularly as an active team member.

If you leave American, you are entitled to receive a distribution of your vested 401(k) account balance; however, taxes and penalties may apply.

For more details about your options, please refer to the Summary Plan Description (SPD) available on the Fidelity NetBenefits® website in the Plan Information section.  You may also speak with an American Airlines 401(k) Service Center at Fidelity representative at 800-354-3412.  Dedicated representatives are available to assist you Monday through Friday, 8:30 a.m. until midnight (ET).

Access in Retirement

With a vested 401(k) account balance greater than $5,000 you can leave your account in the plan and continue to have access to the 401(k) plan’s unique investment options.

Thirty days after leaving American, you can request a distribution of your 401(k) account in the form of:

  • A lump sum;
  • A partial lump sum; or
  • Installment payments.

Please note, when you reach age 70 ½, you are required to take a minimum distribution from your 401(k) account.

Distributions are generally made as a cash payment or as a rollover to another qualified retirement account.  Cash payments received from a 401(k) plan may be subject to taxes and a penalty tax, if considered an early withdrawal.

Because Federal guidelines are complicated and subject to change, you may want to consult a qualified tax advisor before receiving a payment from the 401(k) plan.

For more information, visit the Fidelity NetBenefits® website or call the American Airlines 401(k) Service Center at Fidelity at 800-354-3412.  Dedicated representatives are available to assist you Monday through Friday, 8:30 a.m. until midnight (ET).

Loans

Although your 401(k) account is intended for the future, you may borrow from your account.  Keep in mind that taking a loan from your 401(k) account reduces your earning power because while your loan balance is outstanding, there is less money in your account earning towards your retirement.  So, we encourage you to consider all of your options before taking a loan from your 401(k) account.

The 401(k) plan allows for up to two loans at a time up to the lesser of fifty percent (50%) of your vested account balance or $50,000 (less the highest outstanding loan balance in the previous 12 months).

  • General Purpose loans do not require paperwork and can be paid back with interest for up to 60 months.
  • Primary Residence loans do require paperwork and approval. Once approved, your primary residence loan can be paid back with interest for up to 30 years.

Plan loans are paid back through after-tax deductions from your paycheck.  If you should take a leave of absence* or leave American with an outstanding loan, you may continue to repay the loan for the remaining repayment period.  You will, however, need to make arrangements with Fidelity for repayment.

*Loan repayments while on an unpaid leave of absence are automatically suspended for up to 12 months for the life-of-the-loan.  If you return from your leave of absence prior to 12 months or if you remain on a leave of absence and exhaust the 12-month repayment suspension period, loan repayments must resume.

For more information, visit the Fidelity NetBenefits® website or call the American Airlines 401(k) Service Center at Fidelity at 800-354-3412.  Dedicated representatives are available to assist you Monday through Friday, 8:30 a.m. until midnight (ET).

Withdrawals While Employed

Withdrawals from the 401(k) plan are generally permitted under the following circumstances:

Withdrawals after 59 ½ – You may withdraw all, or any portion, of your vested 401(k) account balance upon reaching age 59 ½.  Each withdrawal request will be paid as either a cash withdrawal subject to taxes or as a rollover withdrawal to another qualified retirement account.

Withdrawals of Rollover and/or After-Tax Contributions (if any) – You may withdraw all, or any portion, of your Rollover Contributions and/or After-Tax Contributions at any time.  Each withdrawal request will be paid as either a cash withdrawal subject to taxes (and penalty tax, if applicable) or as a rollover withdrawal to another qualified retirement account.

Hardship Withdrawals – You may withdraw your contributions (without earnings) from your 401(k) account if you establish that the withdrawal is necessary to avoid a financial hardship as defined by the IRS.  You must be able to demonstrate that your request qualifies as an immediate and heavy financial need.  Hardship withdrawals are subject to taxes (and penalty tax, if applicable) and not eligible to be rolled over to another qualified retirement account.  If your hardship withdrawal is approved, your contributions to the 401(k) plan must be suspended for six (6) months.  After the six month suspension, your contributions will automatically be restarted.

For more information, visit the Fidelity NetBenefits® website or call the American Airlines 401(k) Service Center at Fidelity at 800-354-3412.  Dedicated representatives are available to assist you Monday through Friday, 8:30 a.m. until midnight (ET).

Where to Go For Help

Take advantage of the many resources available through the American Airlines 401(k) plan.  Get quick answers, individual consultations, and even professional account management services.

American Airlines 401(k) Service Center at Fidelity

NetBenefits |  800-354-3412

For day-to-day activities, monitoring your 401(k) account, as well as tools and resources to help you make the most of your 401(k) savings.  Dedicated account representatives are available to speak with Monday through Friday, 8:30 a.m. until midnight (ET).

Fidelity one-on-one advice

Investor Centers |  800-603-4015

Free one-on-one consultations with a Fidelity representative are available to you to discuss your options and your investing style.  Participants should call for details and appointments.

Financial Engines’ Online Advice and Professional Account Management

Learn More | 800-354-3412

Financial Engines offers independent, objective investment advice and management through your American Airlines 401(k) plan.  You can use their Online Advice service at no charge to help refine your investment strategy.  For an additional fee, Advisory Services offers professional account management for your 401(k) account.