Microsoft’s After-Tax Savings Benefit … Just Got Better!

Last year I wrote an article on one of the best benefits for Microsoft Employees – that benefit just got even better! I’ve highlighted three benefits that I believe all Microsoft employees should take advantage of.

401(k) Increase: While previously, a Microsoft employee could contribute $18,000 to their 401(k) in 2017, they can now contribute an additional $500, bringing 2018’s contribution limits to $18,500 for those under age 50 and $24,500 for those age 50 and over. Microsoft will still match the 50% on your regular pretax, Roth, and/or catch up contributions up to $9,250.

After-Tax Contribution: The big surprise this year was the increase in the After-tax Contributions (Non-Roth). Last year’s $20,000 available contribution was one of the best perks that few employees knew about. This year they have increased that to $27,250! On top of that, there is now a little box you can check to automatically convert your After-tax contribution to Roth 401(k) each quarter. You must pay ordinary income tax on the gains you earned each quarter, but that is a small price to pay to sock away $27,250 in Roth dollars this year. Remember too – there is no income limit on this strategy, every employee can do it.

Wellness Reimbursement: Most employees know about the “Wellness Reimbursement” benefit that allows you a free gym membership. However, if the gym isn’t your thing, you can get up to $800 reimbursed towards health and sports equipment, a great benefit that few know about. We recommend you mention it to your Financial Advisor and see if it can play a role in your Financial Plan.