A Guide to Garmin’s 401kSubmitted by Castlebar Asset Management on December 2nd, 2016
Your 401k is often the centerpiece of your retirement planning strategy. For Garmin employees there are great internal resources for HR questions but sometimes they are not able to answer all of your questions reagrding your 401k or you may not be comfortable asking someone financial questions. Garmin International is one of Kansas City’s largest publicly traded companies and their 401k is one the best in the city.
How Does Garmin’s 401k Plan Rank?
According to Brightscope Garmin’s 401k plan ranks well compared to others in its peer group. It receives a score of 81 with the average being a 69. What makes Garmin’s 401k standout? It has a low plan cost and a generous match.
Match and Vesting Schedule
Garmin’s match is one of the most generous I have seen from a public company. They offer two matches. Garmin will match 75% of each participant’s contributions up to 10% of an employee’s eligible compensation. The company also contributes to a pension account equal to 5% of an employee’s salary.
Their vesting schedule follows a standard schedule. An Employee receives 100% of their contribution as soon as it has been made. The employer contribution vests 20% each year over 5 years. If an employee is over the age of 55, everything vests immediately. If an employee passes away or becomes disabled, the employer match also vests.
Garmin’s 401k plan offers an above average fund selection. There is a selection of 30 different funds. The stock and bond funds options offer a solid mix of active and passive funds. Target dated funds are also available but the T. Rowe Price funds are average to above average in terms of their fees. Employees can also elect to have an allocation to Garmin stock. This can lead to a concentration issue, but according to SEC filings Garmin shares only account for about 4% of the total plan holdings.
I can’t emphasis enough how generous the match is at Garmin. Since they will match $.75 of every dollar you contribute up to 10% of your income I encourage Garmin employees to contribute as much as they can to take advantage of the match offered.
The Garmin plan offers a Roth 401k option (after tax) along with the normal pretax version. Contributing to a Roth 401k with a partial or full amount could be beneficial. Meet with a financial planner or advisor to figure out if this is the correct option for today and the future.
Got questions or need help?
If you have any questions about your specific 401k or your Garmin 401k plan, Castlebar has a 401k review service, which is a flat fee service where we'll help review your contribution amounts and see if you'll be able to meet your retirement goals with the current contribution amount. We'll help rebalance your portfolio and come up with a 401k strategy, so that you can maintain this account on your own over time. We'll be able to give you guidance that most people in HR and other programs are not able to provide.
Disclaimer: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your personal financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.