The 401(k) plan is designed to work for you. It’s easy to contribute, it’s flexible and you make important decisions about your account, like how to invest your money. You can contribute up to 80 percent of your eligible pay each year to your 401(k) plan account as pre-tax or Roth contributions (subject to IRS maximums, which are adjusted annually). Pre-tax contributions offer an extra savings boost since your contributions are taken out of your pay before federal and most state taxes are determined.
In addition, if you are age 50 or older, you can make an additional contribution to the plan each year called a catch-up contribution (subject to IRS maximums).
In addition to your contributions, the company will make a matching contribution to your account each pay period of 50 cents on each dollar you contribute, up to 6% of eligible pay. For example, suppose your eligible compensation is $100,000 and you are contributing to get the full company match at 6%. Your contributions would be $6,000 by the end of the year and the company would contribute another 50 cents on each dollar, or $3,000.
For more information about the Company Match, click here.
It’s easy to get started in the 401(k) plan. Simply log on to Fidelity’s website and make your elections. If you do not make an election within 60 days of hire, you will be enrolled in the plan automatically at a 4% contribution rate. You can change this amount or your investment options at any time by logging in to the Fidelity website.
When you open your 401(k) account, be sure to name a beneficiary. Click here for a guide to updating your 401(k) beneficiary.