A Guide to Sprint's 401k PlanSubmitted by Castlebar Asset Management on August 18th, 2016
Sprint has been one of Kansas City's larger employers for a generation. Despite some ups and downs with Sprint's core business the 401k plan has been a great place for you to save for retirement. There are some great internal resources available from your HR rep, but sometimes you would like outside help to see if you are making the right level of contributions and investment selections. We answer some questions about Sprint's 401k below.
How Does Sprint's 401k Plan Rate?
Sprint's 401k ranks well compared to its peers. According to Brightscope their plan ranked in the top 15% of plans with a score of 78. The plan receives a thumbs up for having a low total plan cost and generous matching contribution. It ranks inline with peers like Verizon and CenturyLink.
Match and Vesting Schedule
Sprint has a straight forward matching system. They match 50% of your contributions up to 4% of your pay. This match is on either your pretax or Roth contribution. There is no secondary or performance incentive matches provided.
In terms of an employee’s vesting schedule, it is a better than average vesting schedule. Employees receive 100% of their contribution as soon as it has been made. The employer contribution vests 33% each year over 3 years. If an employee passes away or becomes disabled, the employer match also vests.
The 401k plan offers a solid menu of funds to select from. The target dated funds have a below industry average fee structure. This is always a great to see if you want to set your investment allocation and not worry about it. The stock funds offer several options of active and passive funds. All stock funds fall on the low cost spectrum with the most expensive fund charging a management fee of 0.86%. The bond or fixed income fund options are limited to just two options. This plan also has an auto rebalancing feature which will allow the portfolio to rebalance on a set date each year or more frequently if you would like. This is a terrific tool and will keep investment allocations from going off track.
One great feature that Sprint offers is a Roth 401k option. This is an after tax way to save for retirement. The benefits of a Roth 401k is your contributions and match are not taxed when you withdraw money in retirement. You don't get the tax savings today of the deduction on your contribution, but it will still grow tax deferred. You can discus with your tax professional or financial advisor if this is the right option for you.
Sprint also allows for after tax 401k contributions. This is slightly different than a Roth and is usually reserved for people who contribute above the maximum contribution amount of $18,000. We have written about the topic if you would like more information.
Got questions or need help?
If you have any questions about your specific Sprint 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.