Understand the tax advantage of saving for retirement

Start with the Hewlett Packard Enterprise 401(k) Plan.

If you’re just beginning to save, consider starting with the Hewlett Packard Enterprise 401(k) Plan (the “HPE 401(k)”). When you contribute to your HPE 401(k) account, so does Hewlett Packard Enterprise. HPE will match 100% of the first 4% of pay you contribute. (Note: Any matching contributions are made to your account at the end of each calendar quarter. Matching contributions are made only on pre-tax and Roth contributions.)

If you’re already maximizing the match, you don’t have to stop there: You can contribute up to the IRS limit of $24,500 to your HPE 401(k) account in 2026 through pre-tax or Roth contributions. If you’ll be age 50 or older in 2026, you can contribute an additional $8,000 in catch-up contributions. Plus, you have the option to make after-tax contributions—and save beyond the IRS limit—up to $70,000 in 2026.

Here's a closer look at the different ways to contribute:

• Pre-tax contributions, which reduce your taxable income today. These contributions come out of your paycheck before taxes, and you won’t pay any taxes on your contributions and any associated earnings until you withdraw them. You might consider traditional pre-tax contributions if you want to lower your taxable income for the current year, or if you expect to be in a lower tax bracket in retirement.
• Roth contributions, which can reduce your taxable income in retirement. These contributions come out of your paycheck after taxes, and your contributions and any associated earnings will be completely tax free at retirement—as long as your distribution is qualified. A qualified distribution is one that is taken at least five tax years from the first day of the calendar year in which you make your first Roth contribution and after you have attained age 59 ½, become disabled, or die. You might consider Roth contributions if you have more time between now and retirement to accumulate tax-free earnings, or if you expect to be in a higher tax bracket in retirement.
• After-tax contributions, which allow you to save beyond the IRS limit. Similar to Roth contributions, after-tax contributions are made into your account after corresponding taxes have been deducted from your pay. Because you have already paid taxes on the amount contributed, you don’t pay taxes on that original contribution amount when you make a withdrawal. However, unlike Roth, you owe taxes on the value of any related investment earnings when you withdraw them. Also, unlike Roth or pre-tax contributions, you are generally able to withdraw from your after-tax contribution account at any time, even while working at HPE and before reaching age 59 ½.
• A combination of all three, if you want to diversify your sources of retirement income.

Keep in mind that you can also use the plan’s Roth in-plan conversion feature to convert after-tax contributions to Roth, giving them the same tax advantages as Roth contributions. However, when you convert, you owe taxes on any investment earnings in the year of conversion.

Regardless of how you contribute, any possible investment income grows tax deferred.

To see how changing your pre-tax contributions to the HPE 401(k) could affect your take-home pay, check out the Take-Home Pay Calculator. To see how a small change in your contributions may grow over time, use the Contribution Calculator.

Save even more with an IRA

To further cut your tax bill, you could also consider contributing to an IRA—another tax-advantaged account designed to help you save for retirement. There are two types of IRAs:

• Traditional IRA – Your contributions are made with pre-tax money, which you may be able to deduct on your tax return, and any earnings grow tax-deferred. You pay taxes on your contributions and investment earnings when you make withdrawals in retirement.
• Roth IRA – Your contributions are made with after-tax money, which has the potential to grow tax-free. Your contributions and investment earnings may be withdrawn tax-free in retirement if you meet the IRS qualified withdrawal requirements. A distribution from a Roth IRA is tax-free and penalty-free provided that five years have passed since you contributed to your Roth IRA and you are a qualified first-time home buyer, have attained age 59 ½, become disabled, or die. Note: A Roth IRA allows you to supplement your savings for the future but has IRS income restrictions that can prevent some employees from contributing. However, 401(k) plans don’t have these same restrictions. So, if you’re not eligible to contribute to a Roth IRA, having Roth contributions in your 401(k) can help provide potentially tax-free money to draw on in retirement.

For 2026, you can contribute a total of $7,000 to Traditional and Roth IRAs combined. If you’ll be age 50 or older in 2026, you can contribute an additional $1,000 in catch-up contributions.

To learn more about IRAs, including income limits and withdrawal rules, read Looking for more ways to save for retirement? Check out IRAs.

Time your tax savings

Both the HPE 401(k) and IRAs offer you a way to reduce your taxable income and save for retirement. When you choose to reap the tax benefits—now or in retirement—is up to you. To learn more about traditional and Roth contributions and why you might consider each, read Roth 401(k) and Traditional 401(k) contributions—which is right for you?

The information provided above is general in nature and should not be considered legal or tax advice. Consult with an attorney or tax professional regarding your specific legal or tax situation.

The information contained herein has been provided by HPE and is solely the responsibility of HPE.

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