NVIDIA Employees Can Optimize Benefits for Retirement and Tax Savings
Your NVIDIA employee benefits can help you save for retirement and build your financial security.
From your 401(k) plan to RSUs, these benefits may help lower your taxes. In this video, we walk you through the top NVIDIA employee benefits and provide strategies for prioritizing them to optimize your financial plan.
NVIDIA 401(k)
Make sure you fully fund your 401(k) and earn the maximum employer match.
Your 401(K) is one of the best ways to lower your taxable income. In 2024, you can contribute:
$23,000 if you’re under age 50
$30,500 if you’re age 50 or older
Earn Free Money – NVIDIA Employer Match
For 2024, employees who contribute to their NVIDIA 401(k) can earn a match up to $11,500. NVIDIA will match dollar-for-dollar every pay period, up to $6,000. Then they will match fifty cents for each dollar for the next $11,000.[1]
Taxes and Your 401(k) Contributions
There are two ways you can contribute to your 401(k), and the decision on how to contribute comes down to when you pay taxes.
Traditional pre-tax 401(k): You reduce your taxable income now and pay taxes when you withdraw the money in retirement. Contributions grow tax-deferred until you withdraw them. We recommend that high-income earners make pre-tax 401(k) contributions.
Roth 401(k): You pay taxes upfront and contribute after-tax dollars to a Roth. This money, including the interest earned, is never taxed again when withdrawn in retirement.
Health Savings Account (HSA)
Another way to lower your taxable income is to use a Health Savings Account (HSA).
If you’re enrolled in a high-deductible health plan (HDHP), you’re eligible for an HSA.
HSAs are tax-advantaged savings accounts that provide you with more control over healthcare spending while providing you with a triple-tax advantage:
Contributions to your HSA are tax deductible.
Your money grows tax deferred in the account.
You can withdraw money from your account tax-free if the funds are used for qualified medical expenses.
Many HSA providers offer investment options, such as mutual funds. This allows you to invest your HSA funds and potentially grow your savings even further.
Mega Backdoor Roth
If you know you’re on track to max out your 401(k), the next benefit to prioritize is the NVIDIA Mega Backdoor Roth.
This feature within your 401(k) allows you to contribute after-tax dollars and then automatically convert those dollars to a Roth.
As mentioned above, within a Roth your money grows tax-free. These same dollars, and the growth, are tax-free when accessed in retirement.
In 2024 the federal limits for 401(k) contributions are:
- $69,000 if you’re under age 50
- $76,500 if you’re age 50 older
NVIDIA allows you to contribute up to the federal limit.[2] This means you can contribute over $30,000 in after-tax dollars and immediately convert them to Roth. The Mega Backdoor Roth is a great way to save more for retirement and help reduce your future tax bill.
NVIDIA Employee Stock Purchase Plan (ESPP)
The NVIDIA ESPP is one of the most popular benefits at NVIDIA.
It enables you to purchase NVIDIA stock at a 15% discount with a 2-year lookback.[3] This means your purchase price is based on the stock price when you enrolled and remains fixed for up to two years.
This feature within your ESPP makes this benefit one we think you should prioritize; however, we recommend focusing on tax-advantaged options like the 401(k), HSA, and Mega Backdoor Roth before enrolling in ESPP.
NVIDIA Restricted Stock Units
RSUs are not technically an employee benefit, but they play a key role in maximizing your other benefits.
Your NVDA RSUs vest quarterly and with careful planning, you can use these proceeds to manage your cashflow and prioritize other benefit contributions.
We suggest selling your RSUs as soon as they vest to:
Supplement income, so you can maximize your 401(k), HSA, Mega Backdoor Roth, and ESPP.
Avoid keeping too much of your portfolio tied up in NVIDIA stock, which helps reduce concentration risk.
Maintain a diversified portfolio that is more aligned with your long-term plan.
Questions About Your NVIDIA Employee Benefits?
Investing in your future is one of the most important financial decisions you can make. By taking advantage of NVIDIA’s benefits, you can build a strong retirement savings plan and reduce your tax burden.
If you have any questions about what is best for you, schedule some time with one of our advisors.
[1] https://www.nvidia.com/en-us/benefits/money/401k/
[2] https://www.nvidia.com/en-us/benefits/money/401k/
[3] https://www.nvidia.com/en-us/benefits/money/espp/