Want to save for retirement and save on your taxes? Direct a portion of your annual eligible pay to the Hewlett Packard Enterprise 401(k) Plan through:
- Pre-tax contributions,
- Roth contributions,
- After-tax contributions, or
- A combination of all three depending on your needs.
Each type of contribution offers tax advantages and the opportunity to invest your Hewlett Packard Enterprise 401(k) Plan (the “HPE 401(k)”) account balance for additional possible growth. What’s different is how and when your contributions are taxed as well as eligibility for HPE matching contributions. HPE matching contributions are only made on pre-tax and Roth contributions—not on after-tax contributions. To avoid missing out on the HPE match, you may want to take advantage of those first. Check out the chart below for a closer look at these two 401(k) contribution types:
| Pre-tax 401(k) contributions | Roth 401(k) contributions | |
|---|---|---|
| Who can contribute? | Any employee who meets the eligibility requirements to participate in the HPE 401(k). | |
| How much can I contribute to the 401(k) in 2026? | You can contribute up to 50% of your 2026 eligible pay—through pre-tax contributions, Roth contributions, or a combination of both—up to the IRS maximum limit of $24,500 in 2026. If you will be age 50 or older by December 31 of the calendar year, you can contribute an additional $8,000 on a pre-tax and/or Roth basis in 2026. (After-tax contributions allow you to save beyond the IRS limit—up to $66,000 of eligible pay in 2026.) In addition, HPE will match 100% of the first 4% of pay you contribute on a pre-tax or Roth basis. (Note: Any matching contributions are made to your account at the end of each calendar quarter.) | |
| What are the tax considerations? | When I make contributions?
When I withdraw money from my Hewlett Packard Enterprise 401(k) Plan?
| When I make contributions?
When I withdraw money from my HPE 401(k)?
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| Note: For both contribution types, the IRS generally does not permit withdrawals prior to age 59 ½, except in the case of financial hardship. Qualifying hardship withdrawals are subject to regular taxes plus a 10% penalty tax. | ||
| Who should consider this type of contribution? |
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Not sure which approach is right for you?
Consider your potential sources of income in retirement. In addition to Social Security, you and your spouse/partner may have accrued pension and 401(k) benefits from HPE or another employer. You may also have personal savings and investments that you can draw from or a steady source of monthly income from a life insurance annuity or rental property. Some of your retirement income may be taxable while other sources, such as municipal bonds, health savings accounts, or Roth money, may be tax-free.
Now think about what your expenses might be in retirement—housing, utilities, food, clothing, medical expenses, travel/entertainment, etc. In many years, these expenses may be steady and predictable. In other years, your expenses can be higher than expected and you may have to tap into your savings and investments because your monthly income just won’t cover your expenses. If you have only taxable money to draw from, withdrawing a higher-than-usual amount can bump you into a higher tax bracket and increase your tax obligation for that year.
So, having a diverse mix of taxable and non-taxable retirement income gives you the flexibility to maintain a steady tax bracket and manage your taxable income in years in which you have unexpected expenses. Even if the additional expenses are a surprise, your tax bill for that year doesn’t have to be.
Regardless of whether you contribute to the HPE 401(k) on a pre-tax basis or on an after-tax basis through Roth or after-tax contributions, the important thing is to save.
Due to the differing tax implications associated with pre-tax, Roth, and after-tax 401(k) contributions and the potential impact they may have on your current and future adjusted gross income, which may affect your eligibility for other tax credits and benefits, you may wish to consult with a tax or financial advisor regarding your individual situation.
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Build tax flexibility for retirement
Pre-tax and Roth contributions each offer unique advantages. Understanding the differences can help support your retirement goals.
