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Understanding the Fidelity NetBenefits Information Guide

The Fidelity NetBenefits Information Guide is a free educational resource designed to help people understand workplace retirement and benefit plans. This guide provides information about how retirement accounts function, what investment options might be available through a workplace plan, and how to navigate the online NetBenefits platform. The guide does not determine whether someone qualifies for any specific plan or benefit—instead, it explains what these plans are and how they typically work.

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Fidelity is a major financial services company that manages retirement plans for millions of American workers. According to Fidelity's 2023 data, they administer retirement accounts for approximately 28 million people across the United States. The NetBenefits platform serves as the online portal where participants in Fidelity-managed plans can view their accounts, make investment choices, and monitor their retirement savings.

This information guide is meant for people who have access to a workplace retirement plan through their employer and want to understand how that plan works. Whether someone is brand new to retirement saving or has been contributing for years, the guide offers explanations of common retirement plan features and terminology. It explains basic concepts like 401(k)s, 403(b)s, 457 plans, and individual retirement accounts (IRAs).

Practical Takeaway: Use this guide as a starting point to understand retirement plan basics. If you receive a retirement plan through your job, this resource can help you make sense of your options and how the NetBenefits website works. The guide itself does not make decisions for you—it provides information to help you make your own informed choices.

What Information the Guide Covers About Retirement Plans

The Fidelity NetBenefits Information Guide includes explanations of different types of workplace retirement plans available to American workers. These include 401(k) plans, which allow employees to contribute a portion of their salary before taxes are taken out. According to the Employee Benefit Research Institute, approximately 56 million American workers participate in 401(k) plans, making them one of the most common retirement savings vehicles in the United States.

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The guide also covers 403(b) plans, which function similarly to 401(k)s but are offered by schools, hospitals, and other tax-exempt organizations rather than traditional for-profit companies. Additionally, it explains 457 plans, which are retirement savings programs for certain government employees. These different plan types have varying rules about when money can be withdrawn, how much can be contributed each year, and what happens to the money when someone changes jobs.

One key concept the guide addresses is the difference between traditional and Roth contributions. Traditional contributions reduce taxable income in the year they are made, meaning taxes are paid when money is withdrawn in retirement. Roth contributions are made with after-tax money, but qualified withdrawals in retirement can be taken tax-free. Understanding this distinction matters because it affects how much a person pays in taxes now versus in the future.

The guide explains employer matching contributions—a benefit where the employer adds money to the employee's retirement account based on how much the employee contributes. For example, an employer might match 50% of what an employee contributes up to 6% of salary. This is essentially free money for retirement, so understanding how matching works is important for retirement planning.

Practical Takeaway: Review the sections explaining your specific plan type. If you have a 401(k), focus on those sections. If you work for a school or government agency, look for information about 403(b) or 457 plans. Knowing which type of plan you have is the first step in understanding your retirement savings.

How the NetBenefits Platform Works

The NetBenefits platform is Fidelity's online system where workplace retirement plan participants can view and manage their accounts. The guide provides information about how to log into the platform, what information you can find there, and how to use different features. This includes viewing your current account balance, seeing your contribution history, and reviewing the investments available within your plan.

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One of the main uses of NetBenefits is monitoring investment performance. The platform shows what your money is invested in and how those investments have performed over different time periods—one month, three months, one year, five years, and longer. Understanding investment performance helps people see whether their retirement savings are growing as expected. For example, if someone invested in a target-date fund designed for retirement in 2050, they can see on NetBenefits how that fund has performed compared to its benchmark.

The guide explains how to view your personal retirement plan documents and notices through the platform. When companies send important information about plan changes, contribution limits, or rule updates, these documents often appear in NetBenefits. Having this information in one place makes it easier to stay informed about your specific plan's rules and features.

The guide also describes how the platform allows you to make changes to your contributions—though the actual process of making changes requires following your employer's specific procedures. For instance, if someone wants to increase how much they contribute to their retirement account during open enrollment, they would use their employer's benefits enrollment system, and those changes would be reflected in NetBenefits within a few days.

Practical Takeaway: Log into NetBenefits regularly to review your account. Make it a habit to check your balance and investment allocation at least once or twice per year. This helps you spot any errors and gives you a clear picture of your retirement savings progress over time.

Investment Options and How to Understand Them

Most workplace retirement plans offer a range of investment options. The guide provides information about common types of investments available through these plans, including stocks, bonds, and mutual funds. Understanding the difference between these investment types matters because they carry different levels of risk and potential for growth.

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Stock funds invest in shares of companies, and they can offer higher potential returns over long periods but with more year-to-year ups and downs. Bond funds invest in debt instruments issued by governments and corporations, typically offering more stable returns but lower growth potential. Money market funds are the most conservative option, focusing on very short-term, low-risk investments. According to Vanguard's 2023 data, the average 401(k) participant has roughly 57% of their money in stocks and stock funds, 27% in bonds and fixed income, and the remainder in other options.

The guide explains target-date funds, which automatically adjust from more aggressive investments when you're young to more conservative investments as you approach retirement. For example, a 2050 target-date fund is designed for someone planning to retire around 2050. When that person is 30 years away from retirement, the fund holds mostly stocks. As retirement gets closer, the fund gradually shifts to include more bonds and stable investments. This "autopilot" approach removes some of the guesswork from retirement investing.

The guide also describes fund expense ratios—the annual costs charged by investment funds. These fees matter because they directly reduce investment returns. A fund charging 0.05% per year costs much less than one charging 1% per year. Over decades of retirement saving, these small differences add up significantly. According to research from TIAA, a 0.50% difference in annual fees can reduce final retirement savings by approximately 15% over a 30-year period.

Practical Takeaway: Review what investments your plan offers. If your plan includes a target-date fund that matches your approximate retirement year, this can be a sensible choice that requires minimal ongoing decisions. If you prefer to choose your own mix of investments, start with a simple approach: perhaps 60% in stock funds and 40% in bond funds, adjusting based on your age and comfort with risk.

Understanding Contribution Limits and Employer Matching

The guide explains contribution limits—the maximum amount of money the government allows people to put into retirement plans each year. These limits change annually based on inflation. For 2024, the maximum 401(k) contribution is $23,500 for workers under age 50, and $31,000 for workers age 50 and older (the additional $7,500 is called a "catch-up" contribution). Most people contribute far less than these limits. According to Fidelity's 2023 data, the average 401(k) contribution rate was 7.5% of salary across all workers.

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Employer matching contributions are among the most important concepts explained in the guide. When an employer matches contributions, they are providing extra retirement savings at no cost