How do 401(k) Plans Work?
With a regular 401(k) plan, money is deducted from your paycheck before taxes are withdrawn, which lowers your taxable income and therefore, lowers your taxes.
Eligibility for Participation
US Army NAF allows employees to begin making contributions immediately. Check your benefits enrollment materials to see what, if any, restrictions apply.
The IRS sets a maximum amount you can contribute to a 401(k) plan in any given year and it is usually adjusted upward to account for inflation. The limit for 2015 is $18,000, with up to an additional $6,000 being allowed as catch-up contributions for those employees over age 50.
What Is a 401(k) Match?: I keep hearing that I should be taking advantage of my employer match in my 401(k) - Why should I bother?
Participating helps you plan for your financial future.
Your NAF Employer matches your contributions up to 3%, it makes financial sense to take full advantage of it. To ignore it is to miss out on money you are being offered as part of your benefits package. In fact, not all companies offer a matching program. Since US Army NAF does, do not miss out on this opportunity to earn free money.
Here's what you need to know
How Much Does NAF Employee Benefits Match?
US Army NAF matching is up to 3% of salary. Employer matching schedule is 1% to your 1%, 2% to your 2%, 2.5% to your 3% and 3% to your 4%.
Why an Employer Match Is Free Money
One way to appreciate the Army's 401(k) match is to think of it as real money. Say you make $40,000 a year. You contribute 4% of your salary on a pre-tax basis, or $1600.00. With US Army NAF matching 3%, that's $1,200 a year that's being added to your retirement fund or 75% to every 100% you contribute. No matter how much you currently earn, a 3% match is essentially a 3% raise that you are setting aside for later.
So, if you are wondering how much to save in your 401(k), start by saving up to as little as 1% to receive your employer's match. Think Ahead. Plan Now. It's Your Future.
These are the features of your 401(k) Savings Plan (with Fidelity Investments*):
- 2014 IRS Maximum deferral is $17,500 and age 50 and over catch up contribution is $5,500 for a total of $23,000
- Tax Deferred Savings
- Contribute 1%-92% of Net Wages (after mandatory deductions, such as Social Security, Medicare and debt repayment).
- Employer Gives you FREE MONEY in the form of matching contributions from 1%-3%
- Nine Investment Funds and twelve Life Cycle Funds to choose from
- 24 Hour Toll Free automated benefits line and internet access of your personal 401(k) account
- Quarterly Statements
- Hardship Withdrawals
- Loan Program (Maximum 3 loans)
- Rollovers to and from Qualified Plans
- Vesting after 3 years of service
- Over Age 50 Catch Up Contributions Available
- Retirement Consultation
Instructions on logging in to NetBenefits:
In order to access your Fidelity 401(k) account online, you will need your social security number and your Fidelity Personal Identification Number (PIN).
If you have not established a Fidelity PIN, call 1-800-835-5093 and follow the options. While establishing your PIN, you may also enable your online access.
Overseas participants may call Fidelity toll free by dialing the AT&T Direct Access code for that country and then 877-833-9900.
You are now ready to login to the Fidelity Netbenefits site.
401K Plan Information Material:
*No official U.S. Army or Department of Defense endorsement implied by use of external links.