'With rising premiums, shifting federal programs, and mounting medical debt, 3M employees must take a more deliberate approach to budgeting for health care in retirement to help avoid financial pitfalls that could derail long-term plans.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.
'As health care policy continues to evolve, 3M employees should regularly revisit their retirement strategies to account for potential coverage gaps and unexpected medical expenses that could strain fixed budgets.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article we will discuss:
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How rising health care premiums and shrinking federal support may affect pre-Medicare retirees.
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The impact of medical debt, weakened consumer protections, and changing credit rules on retirement outcomes.
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Adjustments to Medicaid and government health care programs that could disrupt early retirement plans.
Health Care Costs Continue to Climb for Retirees
The following article has been revised to reflect recent changes in health care policy and economics for individuals with longstanding corporate careers. 3M retirees and employees preparing for retirement are experiencing higher medical expenses, tighter household budgets, and new health care regulations—an especially relevant concern for those managing fixed incomes or long-term savings goals.
Premiums Rising, Coverage Shrinking
One key factor driving up costs is the anticipated end of Affordable Care Act (ACA) premium subsidies. If these subsidies expire, annual out-of-pocket premiums could increase by an average of $1,247—a 75% jump. 1 This would affect 3M retirees relying on ACA plans prior to Medicare eligibility. Additionally, the One Big Beautiful Bill Act (OBBBA), passed in July 2025, calls for nearly $1 trillion in cuts to federal health care spending, with Medicaid bearing the brunt over the next ten years. 2
These reductions could result in up to 10.9 million Americans losing health care coverage by 2034, according to the Congressional Budget Office (CBO). 3
Eroding Consumer Protections
Policy changes are also exposing 3M retirees to greater financial stress. A federal ruling overturned a consumer-friendly rule that prevented medical debts over $500 from appearing on credit reports. 4 As a result, credit scores for millions could be affected—an issue that carries implications for mortgages, employment applications, and other financial decisions during retirement transitions.
The Weight of Medical Debt
Across the country, medical debt remains a persistent challenge: 5
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- 40% of adults report having dental or medical debt.
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- 1 in 6 borrowed money or used credit cards to pay off medical bills.
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- Over 20 million owe $250 or more; 14 million owe over $1,000; and 3 million owe more than $10,000.
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- Adults aged 50–64 carry more debt than those 65–79 due to delayed Medicare access.
These statistics underscore the pressure on 3M employees who retire before reaching Medicare eligibility.
Health Decisions at Risk
According to Tyson Mavar, a financial advisor with Wealth Enhancement, 'Credit scores may not be affected for those who hold medical debt, potentially resulting in delayed treatment.' This concern is amplified for 3M retirees who may have limited health care coverage and rising expenses.
While some households cope with medical debt by cutting back on food and housing, depleting savings, or borrowing more, these approaches only serve to contribute to poorer health and higher stress.
Government Program Adjustments
Medicaid changes under OBBBA bring added burdens, particularly for early retirees in rural areas. Adjustments include stricter eligibility verification, new work requirements, and increased co-pays of up to $35 per visit for those near the poverty line. These revisions may impact millions of rural Americans and bring added stress to rural health care facilities that are already stretched thin.
A $50 billion Rural Hospital Transformation Fund was announced, but it is expected to address just 37% of anticipated losses and is set to expire by 2032. 6
Why It Matters for 3M Families
Recent health care changes are reshaping retirement planning. Even though 3M offers a range of employee benefits and retirement options, not all workers transition into Medicare or employer-based retiree coverage without gaps. According to Fidelity, a 65-year-old individual retiring in 2025 may need to spend $172,500 health care throughout retirement—not including long-term care. 7
Future policy shifts could add thousands more to that estimate. Keeping an eye on health care policy and evaluating benefit elections are now essential components of retirement planning.
The Bottom Line
Navigating today’s health care system is like taking a road trip with higher tolls, fewer exits, and less reliable maps. 3M employees near or in retirement are encountering a shifting landscape of costs, coverage, and legal rules. If these developments are overlooked, retirement plans may be exposed to financial disruptions that are difficult to recover from.
Being proactive with coverage reviews, medical budgeting, and credit management can help retirees steer clear of costly missteps and adapt to an increasingly complex health care environment.
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- Corporate Employees: 8 Factors When Choosing a Mutual Fund
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- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
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- Corporate Employees: 8 Factors When Choosing a Mutual Fund
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- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
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- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
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Sources:
1. Business Insider. “ Millions of Americans could pay up to $1,247 more for Affordable Care Act health insurance next year ,' by Juliana Kaplan, 23 July 2025.
2. The Guardian. “ Democrats Use New Tactic to Highlight Trump’s Gutting of Medicaid ,” by Stephanie Kirchgaessner, 27 July 2025.
3. USA Today. ' Neary 11 million Americians would lose insurance under Trump's tax bill, analysis says ,' by Ken Alltucker, 4 June 2025.
4. Medicare Rights Center. ' Federal Court Reverses Federal Medical Debt Protections ,' by Julie Carter, 31 July 2025.
5. Peterson-KFF, Health System Tracker. ' The burden of medical debt in the United States ,' by S. Rakshit, M. Rae, G. Claxton, K. Amin, and C. Cox, 12 Feb. 2024.
6. KFF. ' A Closer Look at the $50 Billion Rural Health Fund in the New Reconciliation Law ,' by Zachary Levinson and Tricia Neuman, 4 Aug. 2025.
7. Fidelity. ' How to plan for rising health care costs ,' Fidelity Viewpoints, 12 Aug. 2024.
Given the recent decision by 3M to freeze its pension plans for non-union employees effective December 31, 2028, how should employees prepare for this significant change? What resources and strategies can they explore to ensure they are financially secure during retirement, considering the shift from traditional pension benefits at 3M to 401(k) plans?
Preparation for Pension Freeze at 3M: As 3M plans to freeze its pension plans for non-union employees by the end of 2028, employees should begin by assessing their current pension benefits and understanding how much they will have accrued by the freeze date. It's advisable for employees to consult financial advisors to discuss alternative retirement savings strategies, such as IRAs or other investment vehicles. Additionally, employees should take advantage of the company's matching contributions to 401(k) plans and consider increasing their contributions to maximize their retirement savings.
With 3M transitioning from a pension-based retirement system to a 401(k) structure, what implications does this have for employee contributions and investment options? How can 3M employees utilize the flexibility offered by 401(k) plans to align with their individual retirement goals, and what specific considerations should they keep in mind when selecting investments?
Implications for Employee Contributions at 3M: With 3M transitioning to a 401(k) model, employees will have more control over their retirement investments. This shift means that employees need to be more proactive in selecting investment options that align with their retirement goals. Employees should consider factors like risk tolerance, time horizon, and financial goals when selecting investments. Utilizing tools and resources offered by 3M, such as financial planning services and investment education workshops, can help employees make informed decisions.
How will the freeze on accrual of pension benefits affect the retirement planning process for employees who have been with 3M for many years compared to newer employees? What unique challenges might long-term employees face as they transition from relying on defined benefits to managing their retirement accounts through 3M?
Impact on Long-term vs. New Employees: Long-term 3M employees who have accrued significant pension benefits might find the transition challenging as they shift from a defined benefit to a defined contribution plan. These employees should review their projected pension payouts and consider additional savings or investment strategies to cover any shortfalls. Newer employees might be less affected as they have less accrued in the pension plan and potentially more time to adjust their savings strategies in the 401(k) plan.
What educational resources are available through 3M to assist employees in understanding their retirement plan options following the pension freeze? How can employees leverage these resources to make informed decisions about their future and ensure that they understand the differences between the pension plan and their new 401(k) options?
Educational Resources at 3M: 3M is likely to offer a range of educational resources to help employees understand their new retirement plan options. Employees should look out for seminars, webinars, and one-on-one counseling opportunities that can provide guidance on navigating the changes. The HR department at 3M will also be a valuable resource for accessing personalized advice and detailed explanations of the differences between the old pension plans and the new 401(k) options.
In light of the recent changes to 3M's pension structure, what steps can employees take to maximize their retirement savings over the next five years before the freeze takes effect? What savings strategies are recommended for 3M employees to ensure that they are adequately prepared for retirement given this significant policy change?
Educational Resources at 3M: 3M is likely to offer a range of educational resources to help employees understand their new retirement plan options. Employees should look out for seminars, webinars, and one-on-one counseling opportunities that can provide guidance on navigating the changes. The HR department at 3M will also be a valuable resource for accessing personalized advice and detailed explanations of the differences between the old pension plans and the new 401(k) options.
How does the decision by 3M to move to a 401(k) retirement model reflect broader trends in the corporate world regarding pension plans? What are the potential benefits and drawbacks of this shift from both the company’s and the employees’ perspectives, and how can employees navigate this changing landscape?
Broader Trends in Pension Plans: 3M's decision reflects a broader trend in the corporate world where companies are shifting from defined benefit pension plans to defined contribution plans like 401(k)s. This shift allows companies to reduce the volatility of pension liabilities on their balance sheets and provides employees with potentially higher returns on their retirement savings, albeit with higher risks. Employees need to become more financially literate to navigate this landscape effectively.
What mechanisms does 3M have in place to provide ongoing communication and support regarding the changes to the pension plan? How can employees at 3M stay informed about updates and optimally utilize company meetings or counseling sessions to address their retirement concerns?
Ongoing Communication and Support at 3M: 3M is expected to provide ongoing communication and support to employees regarding the pension changes. Regular updates, FAQs, and dedicated channels for raising concerns, such as HR hotlines or dedicated email addresses, will be crucial. Attending scheduled meetings and participating in counseling sessions can help employees stay informed and prepare adequately for the future.
As the pension plans at 3M are frozen, what options do employees have if they are uncertain about their retirement strategy? How can 3M's HR department assist employees in evaluating their current financial situations and developing customized retirement plans?
Options for Uncertain Employees: For employees uncertain about their retirement strategy post-pension freeze, 3M's HR department can provide significant assistance. HR can offer tools for financial modeling and planning, assist in setting up meetings with financial planners, and provide detailed comparisons of various retirement strategies. Employees should actively seek out these resources and engage with HR to build a personalized retirement plan.
How will the freeze of pension plans impact the overall financial stability of 3M retirees, and what considerations should current employees keep in mind as they anticipate retirement? How does this shift align with 3M’s commitment to employee welfare and long-term planning for their staff?
Impact on Financial Stability of Retirees: The freeze of the pension plans at 3M could impact the financial stability of retirees, especially those close to retirement who have less time to adjust their savings strategies. Employees should review their anticipated income from the pension plan and assess any potential shortfalls. Diversifying investments and seeking ways to generate additional income during retirement can help mitigate the impact of the pension freeze.
If employees at 3M wish to engage with the company's Human Resources department to gain clarity on the new pension and retirement policy implementations, what is the most effective way to reach out? How can 3M staff gain access to additional support and resources related to their retirement options?
Engaging with HR for Clarity: Employees seeking clarity on the new pension and retirement policies at 3M should reach out to the HR department effectively. Utilizing company-provided channels such as HR portals, direct emails, or scheduled office hours can facilitate better understanding and access to resources. Engaging in open dialogues during HR-led sessions or through direct consultations can help employees gain the necessary support and guidance.
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