If you are within a few years of leaving Stellantis, you are about to make four or five decisions in a short window that will shape the next thirty years, and most of them cannot be undone. This guide walks through them in the order they usually come up. Panic Proof Retirement is a fiduciary retirement planning firm in Bloomfield Hills, Michigan, a short drive from the Auburn Hills headquarters, Sterling Heights Assembly, Warren Truck, and the Jefferson North plant, and Stellantis retirees are a large part of who we serve.
1. The pension election is permanent. Treat it that way.
Whether you are hourly under the UAW agreement or salaried, the pension paperwork will ask you to choose between a lifetime monthly benefit and, where offered, a lump sum, and then to choose a survivor option. Three things to know before you sign:
- The lump sum's value moves with interest rates. Lump sums are calculated from the rates in effect for the plan year. When rates rise, lump sums shrink. If a lump sum is on the table, the timing of your retirement date can change the number by tens of thousands of dollars.
- The survivor option is really a life insurance decision. A 50% or 75% joint-and-survivor benefit costs you a smaller check today in exchange for protecting your spouse. Sometimes that is the right trade. Sometimes a separate policy protects the spouse for less and keeps the full pension. Run both.
- The monthly benefit is taxable income every year for life. That matters for the Social Security and Medicare math below.
2. The savings plan: leave it, roll it, or split it
Your Stellantis 401(k) savings plan can stay where it is, roll to an IRA, or be split between the two. There is no single right answer, but there are two rules that decide most cases:
- The age 55 rule. If you separate from Stellantis in or after the year you turn 55, you can take withdrawals from the 401(k) without the 10% early withdrawal penalty. Roll everything to an IRA and that door closes until 59½. Early retirees often keep a "bridge" balance in the plan for exactly this reason.
- Company stock changes the order of operations. See the next section before you roll anything.
3. Stellantis stock in the plan: the NUA rule
If part of your 401(k) is invested in Stellantis (STLA) shares, and especially if you bought them years ago at Chrysler or FCA prices, the net unrealized appreciation rule can save real money. In short: instead of rolling the shares to an IRA, you distribute them in kind to a taxable brokerage account as part of a lump-sum distribution of the entire plan. You pay ordinary income tax only on what the shares originally cost inside the plan. The growth since then, the net unrealized appreciation, is taxed at long-term capital gains rates when you eventually sell, which are lower than ordinary rates for most retirees.
The catch is that it has to be done in the right order, in the right tax year, and as part of a complete distribution of the plan. A standard "roll everything to an IRA" instruction forfeits the treatment permanently. We wrote detailed guides on the same rule for Ford retirees and GM retirees; the mechanics for Stellantis stock are identical.
4. Retiree health care before Medicare
Hourly retirees generally move to coverage through the UAW Retiree Medical Benefits Trust. Salaried retirees may have a health reimbursement arrangement or a stipend rather than a traditional plan. Either way, if you retire before 65 you will have a gap to cover until Medicare, and the cost of that gap depends on your taxable income if you use the marketplace. That is one more reason the withdrawal plan and the health plan have to be built together. Our guide on health insurance before Medicare covers the options.
5. The tax timing that ties it all together
Here is where most Stellantis retirees leave money on the table. Between your retirement date and the start of Social Security, your taxable income drops. If the pension is modest and you delay Social Security, you may sit in the 12% bracket for several years. That is the window to convert pre-tax 401(k) money to Roth, a little each year, up to the top of the bracket. Every dollar converted at 12% is a dollar that never gets taxed at 22% or 24% when required minimum distributions start at 73, and it never drags a Social Security dollar into taxable income with it.
Michigan helps here too. The state's retirement income deduction, phased back in since 2023, is fully restored for the 2026 tax year, so pension and 401(k) income is treated more favorably on the Michigan return than wages were.
The order of operations we typically walk through with a Stellantis household looks like this:
- Pension election and survivor option, with both versions modeled.
- Company stock decision (NUA or not) before any rollover instruction is signed.
- Savings plan split: how much stays in the plan for penalty-free access, how much rolls.
- Health coverage bridge to 65 and what income level keeps it affordable.
- Social Security claiming date for each spouse.
- Year-by-year Roth conversion amounts through the bridge years, under the IRMAA thresholds.
- How much of the nest egg should sit in guaranteed lifetime income so a bad market year early on never changes your lifestyle.
Each step changes the numbers in the others, which is why doing them one at a time, with different people, tends to go badly.
Frequently asked questions
Should I take the Stellantis pension as a lump sum or monthly?
It depends on the lump sum offered, current interest rates, your health, your spouse's needs, and what other guaranteed income you have. A lump sum gives control and leaves an inheritance; the monthly benefit gives a paycheck you cannot outlive. Model both with your actual numbers before signing, because the election is irrevocable.
Can I withdraw from my Stellantis 401(k) at 55 without a penalty?
If you separate from Stellantis in or after the calendar year you turn 55, withdrawals from that 401(k) avoid the 10% early withdrawal penalty (ordinary income tax still applies). The exception is lost on money you roll to an IRA, so many early retirees keep a bridge balance in the plan.
What is NUA and does it apply to Stellantis stock?
Net unrealized appreciation is a tax rule for employer stock held inside a 401(k). If the shares are distributed in kind to a taxable account as part of a lump-sum distribution, you pay ordinary income tax only on the original cost, and the growth is taxed at capital gains rates when sold. It applies to Stellantis shares in the savings plan, but only if the distribution is done correctly and before a standard IRA rollover.
Does Michigan tax my Stellantis pension?
Michigan's retirement income deduction was restored in stages beginning with the 2023 tax year and is fully back for 2026. Whether and how much of a pension is taxed at the state level depends on your birth year and the deduction limits for the year. Federal tax applies regardless.
Where is Panic Proof Retirement and do you work with Stellantis retirees?
Our office is at 40900 Woodward Ave Ste 150 in Bloomfield Hills, Michigan, near the Auburn Hills headquarters. Stellantis, GM, and Ford retirees are a large share of our clients. The first meeting, a written Retirement Check-Up, is free, in person or on Zoom.
A straightforward next step
The free Retirement Check-Up is a 30 to 60 minute conversation in our Bloomfield Hills office, on Zoom, or by phone. You leave with a written picture of where you stand: income, taxes, Social Security timing, and what to do first. Zero cost, zero obligation. or call (844) 447-2642. Our phone is answered around the clock.
Panic Proof Retirement™ is a licensed insurance agency. Investment advisory services are offered through Bridgeriver Advisors LLC, a registered investment adviser; client investment accounts are held in custody at Charles Schwab. Fixed index annuities are insurance products, not securities, and guarantees depend on the claims-paying ability of the issuing insurance company. This article is educational and is not individualized tax, legal, investment, or insurance advice. Tax thresholds and rules change; confirm current figures with your tax professional before acting.