Maximizing The RSP: Quick Tips for American Express Executives
As an American Express executive, you have access to one of the most powerful tools for building long-term financial security: the American Express Retirement Savings Plan (RSP), a 401(k) plan. It offers a convenient, tax-advantaged way to save for retirement through payroll deductions while providing employer-matching contributions and a broad range of investment options.
To maximize your opportunities, consider the following strategies:
Maximize Contributions
The IRS establishes annual contribution limits for 401(k) plans. For 2025, you can contribute up to $23,500, along with an additional $7,500 catch-up contribution if you’re age 50 or older. If you are between the ages of 60 and 63 at year-end, you may be eligible for an additional $3,750 under a special catch-up provision—bringing your total contribution to $34,750 for the year.
As an executive, contributing the maximum amount each year maximizes your tax benefits and accelerates the growth of your retirement savings.
Take Advantage of Employer Matching
American Express matches your Before-Tax and/or Roth contributions dollar for dollar, up to 6% of your Total Pay. This match is made on a Before-Tax basis, regardless of the type of contributions you make.
These post-2009 company matching contributions are 100% vested immediately, meaning they belong to you as soon as they’re deposited. At a minimum, make sure you’re contributing enough to receive the full match—otherwise, you’re leaving money on the table.
Diversify Your Investments
The RSP offers a variety of investment options with different risk and return characteristics, ranging from capital preservation funds to more aggressive growth-oriented choices.
A well-diversified investment portfolio can help you achieve favorable returns while managing risk. Diversification is effective because asset categories often respond differently to market or economic conditions. When one category performs poorly, another may perform well—reducing the impact of volatility on your overall portfolio.
As always, consider your risk tolerance, time horizon, and retirement goals when selecting your investments. A financial advisor can help you create a personalized investment strategy that aligns best with your situation.
Deciding Between Before-Tax and Roth Contributions
The American Express RSP allows you to make Before-Tax and Roth contributions.
Before-Tax Contributions: Deductions from your pay before taxes reduce your current taxable income.
Roth Contributions: Made with after-tax dollars, they do not reduce current income; however, qualified withdrawals during retirement are tax-free.
Roth contributions may be particularly appealing if you expect to be in a higher tax bracket during retirement. You can also split your contributions between the two options to create more flexibility in your retirement income strategy. This decision has long-term implications, so it’s worth discussing with a financial or tax advisor.
Understanding Withdrawals & Required Minimum Distributions (RMDs)
Withdrawals from your RSP are permitted while employed or after separation, provided certain requirement are met.
After leaving the company, you can defer taking distributions until April 1 of the year after you either turn age 73 or retire—whichever is later.
RMDs are required beginning at that point and are calculated annually.
Withdrawal amounts are taken pro-rata from your current investments unless you make other arrangements.
Different contribution types—Before-Tax, Roth, and After-Tax—are subject to various tax treatments.
Before-tax withdrawals are taxed as ordinary income.
Roth withdrawals are tax-free if qualified.
After-tax and stock-based distributions may qualify for special tax treatment, including Net Unrealized Appreciation (NUA) strategies concerning company stock.
Given the complexity of withdrawal rules, it’s advisable to consult a financial or tax advisor to understand the potential tax consequences that may apply to you.
Make the Most of Your Plan
As an American Express executive, your RSP plays a crucial role in your retirement strategy. You can optimize your retirement savings and position yourself for a financially secure future by:
maximizing your contributions,
capturing the entire company match,
diversifying your investments, and
planning ahead for withdrawals and RMDs.
I specialize in helping American Express employees evaluate their retirement options, avoid costly mistakes, and develop strategies that align with their financial priorities.
