Making the Most of Your Executive Benefits at Mastercard
Mastercard is consistently recognized as a world-class employer by putting its employees’ wellness at the forefront. With such a competitive offering for executives, it is important to educate yourself about the Mastercard executive benefits available to you. You should also recognize that you will still need to do some planning on your part to maximize these benefits to reach your financial goals.
Enroll in the Mastercard Savings Plan
New employees are automatically enrolled in this retirement plan after 60 days at a 6% pre-tax employee contribution rate unless the employee declines to participate. The plan will automatically increase their contribution by 1% annually, until they reach 10%. Also, employees are eligible for a matching contribution that is vested immediately. The match is generous compared to industry standards. They will match 167% on the first 6% of base wages which comes out to a 10% match.
In addition to pre-tax and Roth-contributions, the retirement plan also allows after-tax contributions. By making after-tax contributions to your retirement plan, you may be able to convert these contributions to a Roth 401(k) or a Roth IRA. This strategy, commonly known as a Backdoor Roth, allows high income taxpayers to potentially benefit from tax-free growth even if their incomes exceed the limits for regular Roth ownership. Always consult a tax advisor first to determine suitability.
Restricted Stock Units
If you are an executive that receives restricted stock units, it is important to understand the vesting schedule, determine the tax implications and have a plan for how these investments will fit into your overall investment plan in the long term. You want to have a strategy in place that helps ensure that you don’t have concentrated risk if this benefit becomes a big part of your net worth.
Adequate Insurance Coverage
The first step is to understand the group life insurance and disability benefits that are offered by Mastercard and make sure that the benefit would meet your needs. In some cases, individual policies need to be purchased to supplement these benefits. There are many factors that go into this decision but an analysis that helps determine your dependents’ needs can help.
Tax Benefits for Out-of-Pocket Medical Costs
If your health care plan is considered a high deductible plan, you may qualify for a health savings account (HSA). Contributions to an HSA are not subject to federal income taxes, the earnings from interest or investments are tax-free, and distributions to pay for qualified medical expenses are tax free.
The ability to deduct charitable contributions has become more difficult due to the SECURE Act which was legislation passed by Congress in 2019. There are strategies where you can bunch your contributions in a given year to increase the likelihood of being able to receive a deduction. It is also important to note that Mastercard will match your charitable contributions with up to $15,000 each year.
A career at Mastercard can provide you with some great tools to work towards your financial well-being. If you have any questions about any of the above Mastercard executive benefits or would like to discuss how they affect your own situation, feel free to reach out for a complimentary consultation.
Information about the MasterCard Savings Plan was obtained from the Form 5500 for 2020 found at the Department of Labor website www.efast.dol.gov/5500search/
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Securities offered through LPL Financial, Member FINRA / SIPC. Investment advice offered through Stratos Wealth Partners, Ltd, a registered investment advisor. Stratos Wealth Partners is a separate entity from LPL Financial.