Don’t want to contribute to your Guideline 401(k)? You’re free to opt out (see below for instructions) – but before you do, please let us highlight a few often-overlooked advantages of saving with Guideline 401(k):
Think you can’t afford to contribute to your 401(k)?
Guideline lets you contribute less than 1% of your wages if you so desire, and we bet you won’t even miss that 1%. Thanks to the powers of compound interest, contributing even a little amount will go a long way.
Already saving for retirement through another non-401(k) account?
A 401(k) plan beats most traditional investment or banking accounts for several important reasons:
- Pre-tax contributions: With normal savings or investment accounts, you pay taxes on the money you’re saving – and you’ll pay taxes on the earnings of the money you’re saving. In contrast, your 401(k) contributions are taken from your paycheck before taxes, and any earnings will grow tax-deferred.
- Tax-deferred growth: With other investment accounts, you must pay taxes on any capital gains you earn for that year. With a 401(k), you won’t have to pay taxes on those gains until you receive distributions during retirement.
- Immediate tax savings: 401(k) contributions can reduce your taxable income, lowering the amount of income taxes you pay in the year you contribute to the plan. Very few other types of accounts can offer this tax advantage.
- Low expense ratios: According to Morningstar, the average investor in open-end mutual funds paid 0.71% in expenses in 2013. Compare this to Guideline’s average expense ratio of 0.07% – one tenth of the average! Since our expenses are substantially lower than any other investment account, more of your hard-earned money stays put in your account to grow.
- Bankruptcy & Creditor Protection: Your 401(k) account assets are protected in the event of bankruptcy or judgment creditors. Traditional savings or investment accounts don’t offer this security.
- Higher Tax-Advantaged Contribution Limit: If you’re contributing to an IRA, a 401(k) will allow you to save significantly more – up to $19,000 in 2019. Traditional IRAs, on the other hand, only permit up to $6,000 per year (the limit is slightly higher for both cases if you’re over 50 years old).
- Employer Contributions: A benefit unique to a 401(k) is the ability for employers to offer a matching and profit sharing contributions directly to your account, which won't be taxed until you take a distribution. If your employer offers matching, take advantage of the opportunity to save even more for a happy retirement!
Still want to opt out?
No problem! Just follow the steps below and you’ll be all set.
If you haven’t set up your account or enrolled yet, click on the unique enrollment link that was emailed to you.
- In Account Setup, click the link below Save and Continue.
- In the following screen, review and confirm your information. Guideline is required to provide certain plan information to you on an annual basis. Your information will not be used for any other purpose.
- Click Save and Continue.
- Review and acknowledge the Summary Plan Description and Guideline’s Terms and Agreements.
- Click Save and Continue.
- Tell us why you choose to opt-out and click Logout.
Remember, you can opt back in whenever you’re ready by logging into your account at my.guideline.com.
If you’re already enrolled in Guideline’s 401(k), you can opt out by visiting your dashboard.
- Click on “Your Portfolio” on your dashboard’s sidebar.
- Click on the “Change Contribution” button in the upper right.
- Set your Pre-tax (and Roth) contribution rate to 0%.
Note: Opting out will stop all contributions from your paycheck, effective the next pay cycle. You can always re-enroll through the dashboard at any time, should you decide that you want to start contributing to your 401(k) account.