A 401(k) plan is a special type of savings account that is offered through your employer. This account allows you to defer part of your salary today, for future use in retirement. Best of all, you can invest your 401(k) dollars so they can grow!
A Traditional 401(k) plan where you are not taxed on the money you contribute until you begin to take it out at retirement. That means fewer taxes today and more savings for you! (tax-deferred retirement savings)
A Roth 401(k) plan where you invest money now after paying taxes, but when you withdraw it when you retire, you pay no tax on the gains. (after-tax retirement savings)
There are benefits to both options so you should do a little research or consult with your financial adviser, if you have one, before making the decision which works best for you. And know that you can change your enrollment ratio at any time.
Remember that if you withdraw your money early, you may have to pay penalties and taxes. There are a few exceptions that allow you to access your money early.
Our 401(k) provider is Betterment. All paperwork is done online. On your first day you'll have an enrollment email waiting for you.
Note that all of Glitch's matching contributions will go into a Traditional 401(k) plan.
If you wish to transfer money from your old job's 401(k) plan to ours you can find that information in your Betterment account- it's super easy! Just remember that you need to follow the specific instructions otherwise it might count as withdrawing funds and you may have to pay penalties and taxes.
If you have any questions, please ask Liz!