More reasons to save.
When you make contributions in the 401(k) Plan, your contributions are deducted from your pay on a pre-tax basis. Which means your contributions are not subject to federal income tax or most state and local taxes. As a result, it doesn't actually cost a dollar to save a dollar because your take home pay is reduced by less than the amount of your contribution.
To see how it works, take a look at the chart. Let's assume you earn $2,000 per month; and you're not saving in the FedEx 401(k) Plan. Federal withholding on your $2,000 monthly earnings is $560. This brings your net take home pay to $1,287.
Now, using the same chart, let's assume you're contributing $100 per month to the FedEx 401(k) Plan. This reduces your federal withholding to $532. Your net take home pay is $1,215. A difference of $72.
The message here is you can make a $100 contribution to the 401(k) plan for $72. Your current taxes are less because your contribution is deducted from your earnings before taxes are calculated.
Your 401(k) plan assets grow tax-deferred; so, you pay taxes when you receive withdrawals or distributions from the plan.
Take advantage of pre-tax contributions by saving more in the 401(k) plan. Enroll in the 401(k) plan or increase your contributions today at vanguard.com/retirementplans.
NOTE: Assume a federal income tax rate of 28%. In some states, 401(k) Plan participants may benefit from state tax savings, also. Numbers shown in the example are not intended to represent a specific employee but are shown only for illustrative purposes.
The Path to Your Retirement Guide
Please select your operating company from the list below:
- Federal Express Corporation
(includes employees residing in Puerto Rico)
- FedEx Corporate Services, Inc.
- FedEx Corporation
- FedEx Freight Corporation
(holding company employees only)
- FedEx TechConnect, Inc.
- FedEx Trade Networks, Inc.
- FedEx Trade Networks Trade Services, Inc.
- FedEx Trade Networks Transport & Brokerage, Inc
- World Tariff, Limited
- FedEx Custom Critical, Inc.
- FedEx Truckload Brokerage, Inc.
- FedEx Freight, Inc.
- FedEx Ground Package System, Inc.
(excluding employees classified as package handlers)
- FedEx SmartPost, Inc.
(excluding employees classified as parcel assistants)
- FedEx SupplyChain Systems, Inc.
Terms to Know
The accumulation or addition of specific benefits over time, usually based on a set formula(s) as in a defined benefit pension plan.