401(k) Retirement Plan Guide

Building Your Future with BetterHealth's 401(k) Retirement Plan

Planning for retirement might seem far off, but the earlier you start saving, the more comfortable your retirement will be. BetterHealth is committed to helping you build financial security for your future through our comprehensive 401(k) retirement savings plan, administered through Fidelity Investments. This guide will help you understand your retirement benefits, make informed decisions about your contributions, and maximize your savings potential.

Why a 401(k) Matters

A 401(k) is one of the most powerful tools available for retirement savings. Here's why it's so valuable:

Tax Advantages: Your contributions are made with pre-tax dollars, reducing your taxable income today. For example, if you earn $60,000 and contribute $6,000 to your 401(k), you're only taxed on $54,000. That means immediate tax savings now, and your investments grow tax-deferred until retirement.

Free Money from BetterHealth: Our company match is essentially free money added to your retirement savings. Not taking advantage of the full match is like leaving part of your compensation on the table.

Compound Growth: The earlier you start saving, the more time your money has to grow through compound returns. Even small contributions made consistently over decades can grow into substantial retirement savings.

Automatic Savings: Contributions come directly from your paycheck before you see the money, making it effortless to save consistently.

BetterHealth's 401(k) Plan at a Glance

Here's what makes our 401(k) plan competitive and valuable:

Immediate Eligibility

Unlike many employers who require a waiting period, you're eligible to participate in BetterHealth's 401(k) plan from your very first day of employment. There's no need to wait three months, six months, or a year—you can start saving for retirement immediately.

Automatic Enrollment

To help you get started with retirement savings right away, BetterHealth automatically enrolls all new employees at a 3% contribution rate. This means unless you actively opt out or change your contribution percentage, 3% of your pre-tax salary will automatically go into your 401(k) starting with your first paycheck.

Of course, you're free to opt out if you prefer, or you can increase your contribution percentage at any time. We've chosen 3% as a starting point because it's enough to capture part of our company match while still being manageable for most budgets.

Generous Company Match

Here's where BetterHealth's plan really shines: We match 100% of your contributions up to 6% of your salary. This is an incredibly valuable benefit. Let's break down what this means with an example:

Example: If you earn $50,000 per year and contribute 6% ($3,000), BetterHealth adds another $3,000 to your account. That's an immediate 100% return on your investment—you just doubled your money before it even has a chance to grow through investing!

If you contribute less than 6%, you'll still receive the full match on what you contribute. For instance, if you contribute 4%, we'll match that 4%. But to maximize this benefit, we strongly encourage contributing at least 6%.

Immediate Vesting

Some employers make you wait years before you truly "own" their matching contributions—a practice called vesting. At BetterHealth, all company matching contributions vest immediately. That means the money we contribute is yours to keep right away, even if you leave BetterHealth the next day. This is highly unusual and represents our commitment to your financial well-being.

Contribution Limits for 2024

The IRS sets annual limits on how much you can contribute to your 401(k). For 2024, these limits are:

• Standard employee contribution limit: $23,000 per year
• Catch-up contributions (age 50+): An additional $7,500, for a total of $30,500
• Total contribution limit (employee + employer): $69,000

Most employees never approach these limits, but they're there if you're in a position to save aggressively for retirement.

Getting Started: Enrolling in the 401(k) Plan

If you've been automatically enrolled at 3% and you're happy with that, you don't need to do anything—your contributions will begin automatically. However, we encourage everyone to log into Fidelity to customize their investment choices and contribution percentage. Here's how:

Step 1: Create Your Fidelity Account

Visit netbenefits.fidelity.com in your web browser. If this is your first time accessing the site:

1. Click "Register as a new user"
2. You'll need your Social Security Number or Employee ID
3. Enter BetterHealth's company code: BH2024
4. Follow the prompts to create your username and password
5. Set up security questions for account recovery

Step 2: Set Your Contribution Percentage

Once logged in, navigate to the "Contributions" section. Here you can:

• Set your contribution percentage anywhere from 1% to 100% of your salary (though 100% obviously isn't practical!)
• Choose between pre-tax (traditional) or Roth (after-tax) contributions, or split between both
• Review how much BetterHealth will match based on your contribution level

Our Recommendation: At minimum, contribute at least 6% to capture the full company match. If you can afford to save more, 10-15% of your salary is a healthy long-term retirement savings rate.

Step 3: Select Your Investments

This is where your money actually gets invested to grow over time. Your contributions don't just sit in a savings account—they're invested in mutual funds, index funds, and other investment vehicles you choose.

Fidelity offers over 25 different investment options in BetterHealth's plan, ranging from conservative bond funds to aggressive stock funds. This can feel overwhelming if you're not familiar with investing, but don't worry—there are simple options designed specifically for people who want a hands-off approach.

Step 4: Designate Your Beneficiaries

This is an important but often overlooked step. Your beneficiaries are the people who will receive your 401(k) assets if you pass away. You can name your spouse, children, other family members, friends, or even a trust or charity.

In the "Beneficiaries" section of your Fidelity account, you can:

• Add primary beneficiaries (who receive assets first)
• Add contingent beneficiaries (who receive assets if primary beneficiaries predecease you)
• Specify what percentage each beneficiary receives

Keep this updated as your life circumstances change—marriages, divorces, births, and deaths should all prompt a beneficiary review.

Choosing Your Investments: A Practical Guide

If you're not an investment expert, choosing where to invest your 401(k) money can feel intimidating. Here's a straightforward approach:

Option 1: Target-Date Funds (Recommended for Most People)

Target-date funds are designed for simplicity. You pick the fund with a date closest to when you plan to retire, and the fund automatically adjusts its investment mix over time, becoming more conservative as you approach retirement.

Example: If you're 35 years old and plan to retire at 65, that's around 2055. You'd choose the "Fidelity Freedom 2055 Fund." The fund starts with a higher allocation to stocks (which have more growth potential but more short-term volatility) and gradually shifts toward bonds and more stable investments as 2055 approaches.

Pros: Set it and forget it. Professionally managed. Automatically rebalances. Perfect for hands-off investors.
Cons: Less control. Slightly higher fees than simple index funds (though still quite low).

Option 2: Build Your Own Portfolio with Index Funds

If you prefer more control, you can build your own portfolio using low-cost index funds. A common approach is the "three-fund portfolio":

• U.S. Stock Market Index Fund: 60-70% of your portfolio (broad exposure to American companies)
• International Stock Index Fund: 20-30% (exposure to companies outside the U.S.)
• Bond Index Fund: 10-20% (more stable, less volatile than stocks)

The exact percentages depend on your age, risk tolerance, and retirement timeline. Generally, younger investors can tolerate more stocks (higher risk, higher potential return) while older investors should have more bonds (lower risk, more stability).

Pros: Ultra-low fees. Maximum control. Simple once you set it up.
Cons: Requires more knowledge. You need to rebalance periodically.

Option 3: Actively Managed Funds

These are funds where professional managers actively pick stocks and try to outperform the market. They tend to have higher fees than index funds.

Pros: Professional management. Some funds have strong track records.
Cons: Higher fees eat into returns. Most actively managed funds don't consistently beat index funds over long periods.

Don't Forget BetterHealth Stock

You can also invest in BetterHealth company stock through the 401(k). While it's natural to want to invest in your own company, financial advisors generally recommend limiting company stock to no more than 10% of your portfolio. This protects you from concentration risk—if BetterHealth faces financial difficulties, you don't want both your job and your retirement savings at risk.

Managing Your 401(k) Over Time

Changing Your Contribution Percentage

Life changes, and your retirement contributions can change with it. You can increase or decrease your contribution percentage at any time through Fidelity NetBenefits. Changes typically take effect with the next pay period after you submit them.

Pro Tip: Consider increasing your contribution by 1% each year when you receive your annual raise. You won't miss the extra 1% since your paycheck is still increasing, but over time this strategy can significantly boost your retirement savings.

Rebalancing Your Investments

Over time, your investment mix will drift from your original allocation. If stocks have a great year, they might grow from 70% to 80% of your portfolio. Rebalancing means selling some of what's grown and buying what's lagged to return to your target allocation.

If you're in a target-date fund, this happens automatically. If you're managing your own portfolio, aim to rebalance once or twice per year.

Taking Advantage of Catch-Up Contributions

Once you turn 50, you're eligible to make catch-up contributions—an extra $7,500 per year on top of the standard $23,000 limit. This is a valuable opportunity if you're behind on retirement savings or simply want to save more aggressively as retirement approaches.

Understanding Traditional vs. Roth 401(k) Contributions

BetterHealth's plan offers both traditional (pre-tax) and Roth (after-tax) contribution options. Here's the difference:

Traditional 401(k):

• Contributions reduce your taxable income now
• You pay taxes when you withdraw the money in retirement
• Best if you expect to be in a lower tax bracket in retirement
• Provides immediate tax relief

Roth 401(k):

• Contributions are made with after-tax dollars (no immediate tax benefit)
• Withdrawals in retirement are completely tax-free
• Best if you expect to be in a higher tax bracket in retirement
• Provides tax-free income in retirement

You can split your contributions between traditional and Roth if you want to diversify your tax strategy. Many financial advisors recommend this approach for tax flexibility in retirement.

Important: Company matching contributions are always made as traditional (pre-tax), even if you're making Roth contributions.

Accessing Your Money: Loans and Withdrawals

401(k) Loans

While your 401(k) is intended for retirement, BetterHealth's plan does allow you to borrow from your account if you face financial hardship. You can borrow up to 50% of your vested balance, up to a maximum of $50,000.

You'll repay yourself with interest through payroll deductions, typically over 5 years (or up to 15 years for a home purchase). While you're paying yourself back, you're borrowing from your future retirement, and the money you borrowed isn't invested and growing.

Important Warning: If you leave BetterHealth while you have an outstanding 401(k) loan, the remaining balance becomes due immediately. If you can't repay it, it's treated as a taxable distribution, and you'll owe income tax plus a 10% early withdrawal penalty if you're under 59½.

Hardship Withdrawals

In cases of severe financial hardship, you may be able to take a hardship withdrawal from your 401(k). This is a last resort option because:

• You'll owe income tax on the withdrawn amount
• If you're under 59½, you'll also pay a 10% early withdrawal penalty
• The money is permanently removed from your retirement savings

Hardship withdrawals are generally only approved for specific situations like medical expenses, preventing eviction or foreclosure, or burial expenses.

What Happens When You Leave BetterHealth

When you leave the company, you have several options for your 401(k):

1. Leave It at Fidelity
If your balance is over $7,000, you can leave your money in BetterHealth's plan indefinitely. Your investments continue growing, and you maintain access through Fidelity NetBenefits.

2. Roll It Over to Your New Employer's 401(k)
If your new employer offers a 401(k), you can typically roll your BetterHealth 401(k) into that new plan, consolidating your retirement savings.

3. Roll It Over to an IRA
Many people roll their 401(k) into an Individual Retirement Account (IRA) when they leave a job. IRAs often offer more investment choices and more flexibility than employer plans.

4. Cash It Out (Not Recommended)
You can withdraw your entire balance, but you'll owe income tax on the full amount plus a 10% penalty if you're under 59½. You'll also lose years of potential retirement growth. This should truly be a last resort.

Getting Help and Additional Resources

Fidelity Resources

• Website: netbenefits.fidelity.com
• Phone Support: 1-800-343-3548 (24/7)
• Free Financial Coaching: Fidelity offers free consultations with financial advisors to help you plan for retirement
• Planning Tools: Use Fidelity's retirement calculator to estimate if you're on track
• Mobile App: Download the Fidelity app to check your balance and make changes on the go

BetterHealth Benefits Team

For questions specific to BetterHealth's 401(k) plan, eligibility, or company match:

Email: [e-mail]
Phone: [phone] ext. 2300
UKG: Submit a case under "Benefits & Insurance"

Final Thoughts: Start Now, Your Future Self Will Thank You

Retirement planning can feel overwhelming, but the most important step is simply getting started. Even if you can only afford to contribute 3% right now, that's better than nothing. As your income grows, gradually increase your contributions.

Remember: Every dollar you contribute to your 401(k), especially up to that 6% match threshold, is one of the best financial decisions you can make. You're reducing your taxes today, receiving free money from BetterHealth, and building a foundation for a comfortable retirement.

The best time to start saving for retirement was yesterday. The second-best time is today.