Employer retirement plans are the centerpiece of most individual’s retirement savings. It’s best that you have a solid understanding of your company’s plan. Let’s take a closer look at Teladoc Health’s 401(k).
We’ll touch on some 401(k) basics as well as review plan specifics to ensure you’re setting yourself up for a secure retirement.
Teladoc Health’s 401(k) Basics
Provider: Fidelity Investments
Vesting: Immediate on all employee contributions
Employer Match: Dollar for dollar up to 4% of your salary after 1 year of employment
Investment Options: Mutual funds, index funds, target-date funds, and more
Contribution Types: Pre-tax (Traditional), Roth, and potentially After-Tax
2025 401(k) Employee Deferral (Contribution) Limits
Employee Max Contribution $23,500
“Catch Up” Limit age 50 and over $7,500
“Catch Up” Limit ages 60-63 (SECURE Act 2.0) $11,250
After-Tax Contributions (if your plan allows) – additional info below
The Teladoc Match
After one year of service, Teladoc Health matches 100% of your contributions up to 4% of your eligible compensation. This means if you earn $100,000 and contribute 4%, Teladoc contributes another $4,000.
For any younger professionals reading this, understand the power of time and this “free” money from your employer:
| Years | Total Employer Contributions |
Future Value of Employer Contributions |
|---|---|---|
| 10 | $40,000 | $55,266 |
| 20 | $80,000 | $163,982 |
| 30 | $120,000 | $377,843 |
Assumes consistent annual contributions and a 7% annual return
Roth vs. Traditional 401(k) Contributions
This is a tax planning decision. Your thought process should not be, “how do I pay the least amount in taxes this year” but instead “how do I position myself to pay the least amount of taxes over my lifetime.”
Traditional (Pre-Tax) 401(k)
- Lowers your taxable income now
- Tax-deferred growth
- Withdrawals taxed in retirement as ordinary income
- Ideal if you expect to be in a lower tax bracket later
Roth 401(k)
- Contributions made after-tax
- Tax-free growth and tax-free withdrawals
- Great for those in a lower bracket today or expecting higher taxes in the future
Tip: Consulting a CFP® or CPA on a contribution strategy can have a huge impact on your lifetime taxes paid and ending portfolio value.
There’s a third contribution type IF your plan allows for it – After Tax Contributions potentially making way for the Mega Backdoor Roth.
- Contributions are after-tax(nondeductible) and made to the traditional 401(k). Annual contributions can’t exceed $70,000 (under age 50) in ’25. A total of the pre-tax/Roth, employer match, and after-tax.
Tip: Consult a CFP® or CPA to discuss if this is a viable option for you. It’s a tremendous opportunity but it comes with specific steps and potential pitfalls along the way.
Fidelity’s Investment Options
Target-Date Funds
- Automatically adjust asset allocation based on your expected retirement year.
- Offers simplicity and diversification.
Index Funds
- Low-cost, diversified exposure to U.S. and international markets.
- Allows for more flexibility within asset class allocations.
Actively Managed Mutual Funds
- Higher-cost funds with potential for active outperformance.
- Use performance measuring data like Alpha to identify how the active fund compares to its benchmark index.
Maximize Your Teladoc 401(k): General Tips
Contribute at least 4% to get the full match
Revisit Roth vs. traditional annually as your income changes
Use target-date funds or low-cost index funds for simplicity
Catch-up contributions available if you’re age 50+
My Soap Box
Employer sponsored plans make up most individual’s retirement savings and therefore it’s critical that you make well informed decisions. Contribution amounts, type, and investment decisions are just a piece of the puzzle. You need to coordinate additional employer sponsored benefits like ESPP and stock options along with other investment accounts, pensions, and social security.
Consider an Advice-Only financial advisor.
We aren’t interested in charging on your assets or selling you any products like traditional advisors. We are simply here to provide clear advice.
