There's never been a better day than today to save for your future. T-Mobile's 401(k) is a great way to get you there. Have your contributions deducted automatically from each paycheck, pre-tax, Roth, and After-Tax or a combination and invested at Fidelity Investments.
Eligibility to Participate in T-Mobile's 401(k) Plan
Once you're part of the T-Mobile employee family, you're eligible to enroll. It may take up to two weeks to get set up in the system. Not long after that, Fidelity will send an email to your T-Mobile work email address with information about your options.
How To Enroll:
To set up your contributions for 401(k), log in to netbenefits.com or call Fidelity at 800-491-1014.
After your first year of employment, T-Mobile will match your future 401(k) contributions. That's free money! To get the maximum company match, you'll need to contribute at least 5% on your own. After-Tax contributions are not eligible for employer match.
T-Mobile's match is 100% vested, so that money is yours right away—even if you leave the company, it's yours.
Questions?
We have answers! The folks at Fidelity can help you understand how to:
- Roll over your 401(k) account
- Designate beneficiaries
- Take loans and withdrawals from your plan
- Make changes to your deferral elections or investment options
- Set up a Roth In Plan Conversion
- Understand what happens when you leave T-Mobile
Puerto Rico Employees – check out the Puerto Rico Benefits portal for more information on the 1165(e) Savings Plan.
Provider Contact
Fidelity
Toll Free: (800) 491-1014
netbenefits.com
Hours: 5:30 a.m. – 5:30 p.m. Pacific
Q. What is a 401(k) plan?
A. A 401(k) plan is a type of retirement plan that allows you to save and invest for your own retirement. If you elect to participate T-Mobile will deduct a certain amount of money from your paycheck. You can choose to contribute on a pretax basis, Roth and After-Tax. Your 401(k) money is kept for you in an account at Fidelity Investments and is invested according to the investment option(s) that you select.
Q. How much can I contribute?
A. You can make an election for your regular pay that is up to 75% of your eligible wages, in 1% increments. You can also make a separate election for any bonus pay that you might receive, up to 85% of eligible bonus wages, also in 1% increments. Please see the plan document for details on what types of pay your bonus election will apply to.
Your total contribution is subject to the IRS maximum contribution limit for each year. If you will be at least age 50 in the current plan year you can also contribute additional catch-up contributions, which are determined by the IRS each year. A separate election for catch-up contributions is not required.
Q. What is the company match?
A. T-Mobile will start matching your future pre-tax and Roth contributions after you have worked for the company for one year. Your future contributions will be matched $1 for each $1 you contribute up to 3% of your pay, and 50 cents for every $1 on the next 2% of your pay you contribute. To maximize the employer match you will need to contribute at least 5% out of each paycheck. Employer match dollars are immediately vested upon receipt, so are yours to keep without requiring additional service. After-Tax contributions are not eligible for the employer match.
Q. How do I enroll?
A. You can make changes to your 401(k) plan elections at any time of the year online at netbenefits.com or by calling Fidelity at 800-491-1014.
New employees: Fidelity will send you enrollment communications
The following frequently asked questions help explain Roth contributions and Roth in-plan conversions as well as what transferring assets into this kind of account may mean for you.
What are Roth contributions?
You may designate a percentage of your paycheck to be contributed to your workplace retirement plan as a Roth contribution. Roth contributions are considered optional and are made on an after-tax basis. Roth accounts were designed to combine the benefits of saving in your tax-deferred workplace savings plan with the advantage of avoiding taxes on your money when you make withdrawals in retirement.
How Roth contributions work
Think of contributions to your workplace retirement plan as having three separate buckets: pretax, Roth, and after-tax.
When you retire or leave your employer, earnings on your Roth contributions can be withdrawn tax free as long as It has been five tax years since your first Roth contribution and you are at least 59½ years old.
In the event of your death, beneficiaries may be able to receive distributions tax free if you had started making Roth contributions earlier than five tax years prior to the distribution. In the event of disability, your earnings can be withdrawn tax free if the date of withdrawal has been at least five tax years from your first Roth contribution.
Are there limits for Roth contributions?
Roth contributions fall under the same IRS limits as pretax contributions to your plan. Each dollar of a Roth contribution reduces the amount that can be contributed pretax (and vice versa). If you are age 50 or older in the calendar year, you may make an additional catch-up contribution.
What are the similarities and differences between Roth contributions and traditional pretax contributions?
Roth contributions are similar to traditional pretax contributions because you elect how much of your salary you wish to contribute, your Roth and traditional pretax contributions cannot exceed IRS limits, and your contribution is based on your eligible compensation.
But, unlike traditional pretax contributions, Roth contributions allow you to withdraw your money tax free when you retire. And income taxes will be withheld from your after-tax Roth contributions, so your take-home pay may be less than it would be if you made an equal traditional pretax contribution.
How are Roth contributions to a workplace retirement plan different from Roth IRA contributions?
A Roth IRA (individual retirement account) is an account that is outside your workplace retirement savings plan, whereas Roth contributions exist within your retirement savings plan. You may contribute to a Roth IRA only if your adjusted gross income falls below a certain amount. There are no adjusted gross income limits for Roth contributions to your workplace retirement plan.
Contributions to both your Roth workplace retirement plan and your Roth IRA have annual contribution limits. With a Roth IRA, you do not have to take a required minimum distribution (RMD) during your lifetime, but with Roth contributions to your workplace retirement plan, you will have to take RMDs, generally after you have retired and attained age 73. Effective January 1, 2024, the Roth contributions in your workplace retirement plan will be excluded from your RMD calculation. Please speak with your tax advisor regarding the impact of SECURE 2.0 on future RMDs.
How are Roth contributions different from regular after-tax contributions?
Regular after-tax contributions are similar to Roth contributions in that both are made after taxes have been paid on your income. However, there are two key differences: Earnings on regular after-tax contributions are taxable when distributed, and regular after-tax contributions are not limited. Instead, they are part of the larger annual additions limit, which is the total amount that can be contributed to a workplace savings account, including employee and employer contributions and excluding the age 50 catch-up contribution.
How can I maximize my contributions using a combination of pretax, Roth, after-tax, and (if age 50 or older and eligible) catch-up contributions?
Contribute the maximum amount on a pretax and/or Roth basis. Contribute the maximum amount on an after-tax basis, up to the annual additions limit. Take advantage of the additional catch-up contribution if age 50 or older.
What is a Roth in-plan conversion?
A Roth in-plan conversion allows you to move money you have saved in an eligible workplace retirement plan into a designated Roth account within that plan. The following are two types of in-plan conversions that are offered, provided that certain conditions are met and conversions are allowed by your plan:
- A Roth in-plan conversion involves taking a rollover-eligible distribution from your workplace savings plan and directly rolling it over to a Roth account within the same plan. Examples of eligible assets may include your own contributions, contributions from your employer, or assets rolled in from a former employer.
- An expanded in-plan conversion allows eligible vested plan balances to be rolled over to a designated Roth account within your workplace savings plan, even if those amounts are not currently available for withdrawal.
Will the converted assets in the Roth account be eligible for withdrawal?
If you convert money that was already immediately available for a withdrawal, this money will still be immediately available. However, if you convert money that was not available for a withdrawal, those assets will remain unavailable for a withdrawal, just as before the conversion. Even if you are eligible for a withdrawal, certain criteria must be met to receive tax-free Roth withdrawals.
How do I convert my money to a Roth account within my plan?
If you wish to request a transaction or simply speak with a representative about your options, please call your plan’s toll-free number. The representative will review your account with you and provide you with available options for completing a Roth in-plan conversion. You must call Fidelity to request a Roth in-plan conversion each time you want to convert eligible contributions.
Does Fidelity charge a fee to convert to a Roth account?
No.
Do I have to pay taxes on after-tax contributions that I convert to a Roth account? The answer is twofold:
You do not have to pay taxes on the base contribution. You do have to pay taxes on any earnings that accrue between the time you make the base contribution and when you convert the contribution and associated earnings to the Roth.
Do I have to pay taxes on pretax contributions that I convert to a Roth account?
Yes.
When am I responsible for paying applicable taxes incurred as a result of a Roth in-plan conversion?
You must pay all applicable taxes incurred as result of a Roth in-plan conversion for the income tax year in which you made the conversion.
Will I receive a tax form if I move money to a Roth account?
Yes. You will receive an IRS Form 1099-R at the end of the calendar year, which will include consolidated tax information on all your applicable conversions for the year.
What are the benefits of a Roth in-plan conversion?
A roth provides you with additional savings flexibility and diversified retirement assets between pretax and after-tax accounts. You can grow tax-free earnings on your retirement savings. A roth can also potentially reduce future income taxes and keep more of what you earn on your investments in your workplace savings plan.
Do you expect to pay higher taxes in the future?
If you think that you will be in a higher tax bracket after you retire, or if you plan to leave a substantial amount of your retirement assets to your heirs, you may want to consider a Roth in-plan conversion. This is because you may pay lower taxes now than if you wait until retirement to begin taking taxable withdrawals.
Do you have a long investment time frame?
The relative benefits of a Roth in-plan conversion will increase the longer your money remains in the Roth account. Generally, a Roth in-plan conversion may not make sense if your time horizon is less than five years, as amounts withdrawn may be subject to a 10% penalty.2
Do I have the ability to pay the tax on the applicable Roth in-plan conversion?
You will be responsible for taxes owed on the conversion, and you will need to provide for the payment of taxes outside the plan.
Am I required to convert to a Roth?
No. The decision to convert non-Roth money to a Roth account within your plan is completely optional, and you should carefully consider your decision before moving forward. You can also convert a portion of your workplace savings plan contributions—for instance, just after-tax contributions—and your pretax contributions may remain in a separate pretax bucket.
Should I convert eligible contributions to a Roth account within my plan?
When making the decision to convert, you should consider all factors, including how to pay the taxes on the conversion. The decision to convert is an individual one, and we recommend that you consult a tax advisor. To learn more about Roth and what your workplace savings plan allows, please call your plan’s toll-free number to speak with a Fidelity representative.
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Early Career (Early 20s – Late 20s) Establishing Your Financial Foundation
When should you start retirement planning?
The earlier you start, the more time your money has to grow. One of the most powerful principles of wealth creation is the power of compounding. Essentially, this is the increased value of an asset resulting from re-investing earned interest and dividends over time. Knowing this, the most important decision that you can make in your 20s is to start saving now.
Identify and prioritize your financial goals.
What do you imagine for your future? Whatever it may be, defining specific financial aims will make them much more likely to happen. Remember, these don’t have to be set in stone. In fact, you’ll likely revise them throughout your life. Categorize each one as short-, mid- or long-term, then prioritize each as being critical, a need, or a want. Just getting started is a big step in the right direction.
Establish an emergency fund:
Having at least $1,000 set aside for unexpected expenses, regardless of your financial position, is extremely important. Start building an emergency fund – roughly equal to 3-6 months’ worth of must-pay expenses.
Pay yourself first:
While saving as much as you can comfortably set aside may make logical sense, it isn’t always easy to do. Self-control and delayed gratification are not skills most of us are born with, so force the issue and pay your future self first. Set up automatic payroll deductions that deposit directly to savings, investment and/or retirement accounts. Your instinct to save will get stronger as you do it.
Create and stick to a workable budget:
Funding goals begins with managing your day-to-day expenses and planning ahead to cover those that may not occur every month. Analyze and track your spending to figure out where your money is going. Rank essential recurring costs over optional ones. If you decide to make some cuts to your monthly spending, it’s important to follow through and allocate these funds toward paying off debt or bolstering savings to achieve your short and long-term financial aspirations.
Avoid or limit debt:
Think carefully before incurring any type of debt. Whether it is an auto loan, mortgage or a credit card, make sure you are living within your means. If you ultimately decide to take on debt, work on your budget to be sure the payments are affordable given your income.
Understand your retirement savings options:
Learn how the tax-advantaged savings accounts provided by your employer work; know the difference between pre-tax and Roth alternatives. If your plan has an ‘auto-increase’ feature, you may want to sign up to automatically increase your contributions as your income rises. If your employer fully or partially matches your contributions, try to contribute enough to get the full match — otherwise, you are leaving free money on the table. If you change jobs, think about the long-term, and resist the temptation to cash-out retirement accounts.
Take advantage of all of your employer-provided benefits.
In addition to your company match for retirement accounts, consider working towards maximizing your annual contributions to other tax-advantaged offerings at work, including a Health Savings Account (HSA), if available to you. Additionally, you may want to learn more about your company’s Employee Stock Purchase Plan (ESPP) and Employee Stock Grants.
Build a strong credit profile.
Having good credit can open many doors for you down the road, such as qualifying for the lowest interest rates on a new car loan or a future mortgage on your first home. The earlier you start building credit the better. One way to do this is to open a credit card and use it to pay for essentials (like gas or food). Then - and this is important - by making timely payments for the full balance due each month, you will demonstrate an on-time payment history and will have only purchased need-to-have items that you would have bought anyway.
Mid-Career (Early 30s - Mid 40s) Balancing Financial Priorities
Make the most of your cash.
Understand what you’re really spending each month. Create a realistic, systematic plan to save for shorter-term aims, such as vacations, home maintenance and taxes, plus longer-term goals like funding your kids’ college education. Resist the urge to cut back on retirement savings to meet other expenses or accommodate other priorities.
Strategize your debt.
Before you borrow, carefully analyze the impact that major purchases may have on your cash flow. If you have debt, the strategies you put in place now can shape how quickly you can pay it off. It’s critical to get as much of this debt behind you as possible at this stage in life, but don’t neglect to invest while paying down debt. The rewards of investing can be substantial the earlier you begin.
If you have a mortgage, consider your long-term plan.
Do you want to have a mortgage after you retire? Paying it off beforehand could make sense from a budgetary standpoint. Refinancing may also be an option in some situations, though it’s important to understand the consequences.
Maximize your company-sponsored retirement account, the T-Mobile 401(k) Savings Plan.
If you want to save beyond the maximum annual salary deferral contribution, T-Mobile’s Plan allows for ‘after-tax’ contributions. The plan allows Roth In Plan Conversions. Additionally, you may want to investigate and participate in your company’s Employee Stock Purchase Plan (ESPP) and Employee Stock Grants, if you aren’t already doing so.
Don’t overlook Health Savings Accounts, if you’re eligible.
HSAs offer a triple tax benefit: a tax deduction on the contributions, tax-free investment growth and tax-free withdrawals when used to pay for qualified healthcare expenses. This can also be one of the best retirement accounts available, provided you contribute to it annually and pay your medical expenses out of pocket, allowing your contributions to be invested with the potential to grow tax-free.
Understand the importance of tax diversification.
Unlike traditional 401(k)s that allow pre-tax contributions but have taxable withdrawals, a Roth 401(k) allows you to contribute after-tax funds and then make tax-free withdrawals as a retiree. Look at the balance between traditional (pre-tax) and Roth (after-tax), and traditional after-tax in your retirement accounts, factoring in your current income and time until retirement. In general, Roth 401(k) rules allow you to make “qualified” (or penalty-free) withdrawals of both contributions and gains after age 59 1/2, as long as your first contribution to your account was at least five tax years earlier.
Save outside of your company-sponsored retirement accounts.
Once you reach your maximum annual contribution limits for tax-advantaged options through your company, identify other ways to save, such as making after-tax contributions, contributing to a Traditional or Roth IRA, participating in an employee stock purchase plan or funding a taxable brokerage account.
Develop an investment plan.
Explore the types of investments and diversification strategies that will work best to achieve your objectives. Annually, review your investments and allocations to ensure they remain aligned with your objectives and risk tolerance. If your asset allocation has shifted, evaluate rebalancing. Seek professional investment advice if you need it.
Plan for the unexpected with insurance.
If anyone depends on your income, make sure you have an adequate amount of life insurance in place. Disability insurance can protect at least some of your income if you can’t work for an extended period because of an illness or injury. If your company provides life and/or disability insurance, assess if it makes sense for you to supplement these coverage amounts.
Create an estate plan.
Documents like a will, healthcare directive, as well as healthcare and financial powers of attorney can protect you, your family, and your possessions. If you have minor children, an estate plan is crucial because it allows you to name the kids’ guardian in the event of your death.
Designate beneficiaries on retirement accounts, annuities, and life insurance policies. Beneficiary designations may supersede instructions in your will or trust, so be sure they are kept up to date.
Late Career (Mid 40s - Mid 50s) Getting Real About Retirement
Verify that you are on track to reach your retirement goals.
After a decade (or maybe two) of saving for retirement, it’s a good time to plug in the amount that you’ve accumulated into an online calculator to get a rough estimate of what it might grow to by the time you plan to retire.
Make the most of employer savings options.
If your retirement nest egg isn’t projected to be quite big enough, think about making “catch-up” contributions, allowed when you’re 50 or older. If offered, also look into Health Savings Accounts (HSAs). HSA funds roll over from year to year. If you can pay for medical expenses without tapping into your account, you can save the money in your HSA to use in the future, even if you leave the company or retire. You may want to explore and participate in your company’s Employee Stock Purchase Plan (ESPP) and Employee Stock Grants, if eligible. If you’re already funding employer-provided savings accounts to the max, you might want to look into opening an individual retirement account or IRA. You can also open a taxable account with an investment management company or brokerage firm.
Save outside of retirement accounts.
There are a wide range of investment choices available such as individual stocks and bonds, actively managed mutual funds, index funds and exchange-traded funds that may make sense. Although these investments may not reduce your income tax for the current year and you might have to pay capital gains tax if you sell the investments for a profit, you likely will have significantly more flexibility. Keep in mind, you don’t have to wait until you’re making the maximum annual allowable contribution to your retirement plans (or other tax-advantaged accounts) before you start investing in taxable accounts. Determine whether your overall financial plan could be aided by investing for medium or long-term goals that aren’t retirement related.
Consolidate your investments.
If you started investing in multiple accounts in your 20s, your portfolio may include 401(k) accounts with a few employers, a Roth IRA that you started right out of college and some online investments you built up over the years. Think about consolidating those investments. Pooling them in one place may make it easier to see the role each investment plays in achieving your financial goals. It may also help you avoid redundancies and manage your overall risk.
Get real about retirement – create a realistic budget.
As you approach 50, it’s probably time to become more realistic about when you want to retire, how much income you’ll need, and what your current retirement savings are projected to be once you reach retirement age.
Estimate retirement income.
Identify sources of income in retirement including Social Security, retirement savings, pensions, investments, etc.
Forgotten funds.
Could there be untracked pensions and/or retirement benefits from any of your previous employer(s)? If eligible for a pension, evaluate and select the optimal payout option.
Analyze expenses.
Bucket your expenses into ‘essential’ and ‘discretionary’ categories to determine how much flexibility you have to reduce costs if circumstances change.
- Don’t forget planned large expenditures as well as unforeseen large expenses.
- Healthcare and long-term care costs are especially important to accurately budget for. With increased age come increased costs associated with healthcare. Most people become eligible for Medicare at age 65.
- If you are planning to retire before 65, having a plan to get health insurance is vital to a successful retirement.
Where will you live in retirement?
Whether staying in your current home or moving, have you thought through how to prepare financially? If you intend to stay in your home, do you have a plan to pay off your mortgage by (or early in) retirement
Understand the risks.
Compare your expected income to your projected expenses to see if you are on track to cover all of your expenses in retirement.
Pre-Retiree (Mid 50s - Mid 60s) Preparing for Financial Independence
Create a timeline to retirement.
Think about things like major purchases or gifts, such as a vacation property or funding grandchildren’s education savings. It’s important to have a backup plan in case you leave the workforce earlier than expected due to illness or layoff.
Where will you live?
Your monthly housing expense could be one of the largest in your budget, or you might have the peace of mind of having a relatively low monthly expense if you paid off a mortgage or moved to a smaller home with lower costs. Part of your decision about your retirement date might hinge on your housing plans. If you are renting, be sure to plan for annual increases, and if you own a home, plan for expenses such as property taxes, insurance, upkeep and maintenance.
Need to save more?
Whether you plan to retire early, late, or never, having an adequate amount of money saved can make all the difference. Your focus should be on building out or catching up, if necessary. If you’re between 55 and 64 years old, you still have time to boost your retirement savings. Health Savings Account (HSA) ‘catch up’ contributions are allowed for those 55 and older. Depending on your retirement goals, you might need to be saving more of your income in your 60s. Retirement savings plan contribution limits could mean you need to save extra in taxable accounts like a brokerage account. How aggressively you need to save also depends on what other sources of retirement income you reasonably expect.
If you’ve saved enough, consider leaving your nest egg alone.
After age 59 ½ you can begin to make penalty-free withdrawals from your traditional retirement plans and IRAs. But just because you can doesn’t mean you should. The longer you leave your retirement accounts untouched (up to age 72, when you must begin to take required minimum distributions from some of them), the more savings you will likely have for later.
Estimate your long-term care needs.
If you’re still in good health and eligible for coverage, think about shopping for a long-term care (LTC) policy. If you already have coverage in place, review your policy to ensure it still meets your needs. Alternatives to LTC insurance could include tapping into ‘living benefits’ on a life insurance policy or purchasing a combination LTC/ life insurance policy.
HSAs & Medicare (FAQs)
If you have one, you can no longer contribute to a Health Savings Account (HSA) when you sign up for Medicare. Also, when you enroll in Medicare, Part A will be effective retroactively 6 months or to age 65, whichever is shorter. Any HSA contributions made in this retroactive period will be taxable. You can still use your HSA funds if you have Medicare coverage. You may withdraw funds from your HSA at any time, regardless of whether you are eligible to contribute to your HSA. Once you reach age 65, you have more ways to use your HSA funds. For example, you may use your tax-free and penalty-free funds for qualified healthcare expenses as well as to pay for Medicare Parts A, B, and D premiums and Medicare Advantage premiums. Reaching 65 also enables you to use your HSA funds for non-qualified healthcare expenses with no penalties. Once you turn 65, you can withdraw your HSA funds even for non-qualified expenses, but you will be subject to taxes at your ordinary income tax rate.
Reorient your investment plan.
Create a plan to examine and possibly reallocate your investments between now and retirement. Consider an investment strategy for generating necessary retirement income while allowing your assets the potential to grow after you retire.
Plan for Social Security. (Social Security Tool)
Social Security benefits will be based on your 35 highest years of earnings, so they may rise if you continue working. Your benefits will also vary depending on when you start collecting them. You can take benefits as early as age 62, although they will be permanently reduced from what you’ll receive if you wait until your ‘full’ retirement age (currently 66-67 for anyone born after 1943). You can also delay receiving Social Security up to age 70, in return for a larger benefit.
Tax bracket planning.
Determine a safe withdrawal rate. How much can you take from your nest egg each year and expect it to last? Factors such as age, health and other sources of retirement income (e.g. Social Security, annuities, deferred compensation and taxable investments) could justify lower or higher withdrawal rates. Prepare for the tax impact of taking distributions from 401(k)s, IRAs and other sources, including employer pension plans.
Review wills, trusts and beneficiary designations.
Retirement planning should include a full review of your estate plan with your attorney. Make sure your documents – including beneficiary designations for insurance and retirement accounts – are current, taking into account life events, such as birth or adoption of a child or grandchild, marriage or divorce (your own or a family member’s), or loss of a loved one. As you plan for the changes in your life that naturally occur as you grow older, make certain that your estate plan covers any contingencies that could arise. A complimentary resource available through The Hartford to assist with will creation or will editing can be found here.