The Fidelity Salary Reduction Agreement 2019: Understanding the Basics
In 2019, Fidelity Investments announced a new Salary Reduction Agreement (SRA) program for its employees. The program was designed to help employees reduce their taxable income while also increasing their savings. If you`re a Fidelity employee, or if you`re considering a job with the company, it`s important to understand the basics of the SRA program.
What is the Fidelity Salary Reduction Agreement?
The Fidelity Salary Reduction Agreement is a voluntary program that allows employees to reduce their taxable income by contributing a portion of their salary to a pre-tax retirement savings account. The account is called a 401(k) plan, which is a type of retirement savings plan that is offered by many employers.
When you participate in the SRA program, you agree to have a portion of your salary deducted from your paycheck and contributed to your 401(k) plan. The amount that you contribute is up to you, within certain limits set by the IRS. The contributions you make to your 401(k) plan are tax-deferred, which means you don`t pay taxes on the money you contribute until you withdraw it later in life.
What are the benefits of participating in the SRA program?
Participating in the Fidelity Salary Reduction Agreement program can offer many benefits to employees. Here are some of the key advantages:
1. Save money on taxes – When you contribute to your 401(k) plan, the money you contribute is deducted from your taxable income. This means you pay less in taxes, which can help you save money each year.
2. Boost your retirement savings – By contributing to your 401(k) plan, you`re investing in your future retirement savings. Over time, your contributions can grow through compound interest, which can help you build a substantial nest egg.
3. Access to employer contributions – Some employers, including Fidelity, offer matching contributions to employees who participate in their 401(k) plan. This means that for every dollar you contribute, your employer also contributes a certain amount, which can help you save even faster.
4. Customize your savings plan – With the SRA program, you can choose how much money you want to contribute each year, within certain limits. This allows you to tailor your retirement savings plan to your specific needs and goals.
How do you enroll in the SRA program?
To participate in the Fidelity Salary Reduction Agreement program, you will need to enroll in your employer`s 401(k) plan. This can typically be done through your HR department, and you`ll need to provide some basic information, such as your name, date of birth, and Social Security number.
Once you`re enrolled in the 401(k) plan, you can elect to participate in the SRA program. You`ll need to choose how much money you want to contribute each year, and how often you want your contributions to be deducted from your paycheck.
In conclusion, the Fidelity Salary Reduction Agreement program offers many benefits to employees, including tax savings, increased retirement savings, and access to employer contributions. If you`re a Fidelity employee, or if you`re considering a job with the company, be sure to understand the basics of this program and how it can help you achieve your financial goals.