The Meta (Facebook) 401(k) is a retirement savings plan that allows employees to invest a portion of their salary into long-term investments and save for their retirement. Your contribution and the Meta match are 100% vested from day one with the company.
What is the 401(k) Employer Match at Meta?
Starting on January 1, 2022, Meta will match $1 for $1 of your 401(k) contribution up to 50% of the IRS Federal limit. This is an increase from a prior match of 50% of your regular 401(k) contributions up to 7% of pay. If you are under 50 years old you can contribute up to $20,500. If you are 50 or older you are eligible for a to contribute an additional $6,500/year as a catch-up contribution, enabling you to contribute a total of $27,000.
Now let’s look at Meta’s employer match, assuming you are making the maximum annual contribution.
You will earn an additional $10,250 towards your 401(k) if you are under 50.
Now this part is huge! If you are over 50, Meta will match $1 for $1 of your catch up contribution up to 50% of the IRS Federal limit. This is an additional $3,250 towards your 401(k)! Most employers do not match the catch up contribution. If you are 50 or older we strongly encourage you to maximize this employer match benefit.
Two primary ways for employees to contribute to their regular 401(k)
Traditional Pre-Tax 401(k)
Make contributions before taxes. You get a tax break up front, lowering your current income tax bill; however, money withdrawn at retirement will be taxed.
Make contributions after taxes. With this option, when you withdraw savings for retirement, you are not taxed.
The difference between a traditional and a Roth 401(k) comes down to when you pay taxes. Roth accounts are generally advised for younger savers; however, a Roth 401(k) can also provide older savers the chance to benefit from tax-free distributions.
How Does Saving into a 401(k) Reduce Taxes?
The tax benefits associated with a 401(k) plan include being able to make deductions from your salary on a pre-tax basis. This can lower your annual taxable income. Your 401(k) earnings accrue on a tax-deferred basis, meaning the dividends and capital gains accumulating within your plan are not subject to tax until they are withdrawn at retirement. Many people are in a lower tax bracket when they retire which compounds the tax reduction benefit of saving into a 401(k).
Do You Have Questions on the Meta 401(k) Plan?
If you want to learn more about how to make the most of your compensation and employee benefits at Meta, please schedule some time to discuss your questions.