Nine Tips About Saving in the XPO 401(k) Plan
- Just do it. Enroll today. It’s up to you to enroll in the 401(k) Plan. Consider an initial contribution rate of 5% of pay so you get the full company match. To get started, connect with Fidelity (scroll down for contact information).
- XPO makes a matching contribution of up to 4% of pay if you contribute 5%. XPO matches dollar-for-dollar on the first 3% you contribute and then $.50 on the next 2% of pay you contribute. That’s like getting a 4% raise. True, you have to contribute to get the company match, but you should save for retirement anyway, so why not take advantage of the free money from XPO?
- The sooner you start saving, the better. Thanks to the XPO matching contributions and compound growth, you could reach your savings goal with a lot less of your own money than if you start saving later and try to catch up. You’ll also lower your taxable income while you save.
- You can contribute pre-tax pay and pay taxes later. When you contribute pre-tax dollars to a 401(k) account, it reduces your taxable income on your paycheck. You get this tax break upfront but have to pay taxes when you take the money out in retirement.
- You can contribute post-tax pay to avoid paying taxes in the future. When you contribute post-tax dollars to a Roth 401(k) account and leave it in at least five years and don’t withdraw the money until at least age 59½, you take the money out in retirement tax free.
- You decide how to invest your money. Choose from target date funds that automatically rebalance to a more conservative asset mix the closer you get to retirement, or create your own portfolio from funds that match your tolerance for risk.
- Expect the value of your 401(k) account to change daily. It will go up and down with the financial markets. Making investment decisions in response to daily fluctuations could reduce the amount you save over the years.
- Your 401(k) is not a bank account. You can borrow from your account if you need to, but there are certain rules you must follow. Financial experts generally agree it’s not a good idea to withdraw money because when you do, it can’t grow through compounding. Over time, compound growth can increase your savings by thousands — even tens of thousands — of dollars.
- You have help. Through Fidelity, XPO gives you access to free resources to help you make smart decisions about saving and investing for retirement: 401(k) learning clips, articles, savings calculators and more accessible by single sign-on from myXPO Portal, as well as expert financial education. The more you know about saving for retirement, the more likely you are to reach your goal.