5 Essential Year-End Financial Planning Decisions for Dell Employees

1. Maximize Savings Opportunities

Do you have extra funds available to save before the end of the year? Here are a few savings opportunities specifically for high-earning Dell employees.

Health Savings Account (HSA)

For those with a high-deductible health plan, contributing to an HSA offers triple-tax benefits: contributions, growth, and withdrawals for qualified expenses are all tax-free. The 2024 HSA contribution limits are $4,150 for individuals and $8,300 for families. There is a $1,000 catch-up available for individuals aged 55 or older. Dell contributes $750 if you cover yourself and $1,500 if you cover yourself and dependents.

Learn More: HSA at Dell

Dell’s 401(k) Match

Dell matches contributions up to 6% of your salary, capping at $7,500. This is essentially free money and a great way to boost retirement savings.

Max Out 401(k)

The 2024 401(k) contribution limit is $23,000 for those under age 50. There is a $7,500 catch-up contribution available to individuals aged 50 and over. Maxing out contributions can help reduce taxable income and build substantial retirement savings.

Learn More: 401(k) at Dell

Backdoor Roth IRA

For employees who exceed the income limits for a traditional Roth IRA, a backdoor Roth strategy may allow you to contribute to a Roth by converting a traditional IRA. The 2024 IRA contribution limit is $7,000. There is a $1,000 catch-up contribution available to individuals aged 50 and over.

Learn More: Backdoor Roth Guide

Spousal Backdoor Roth IRA

If you’re married, consider setting up a spousal backdoor Roth IRA for your partner, utilizing the same $7,000 or $8,000 IRA contribution limit. This is especially beneficial if one spouse has lower retirement contributions.

Mega-Backdoor Roth

Dell offers a Mega-Backdoor Roth option, allowing after-tax contributions to a 401(k) plan that can later be converted to a Roth IRA, with contribution limits up to $69,000 minus the 401(k) elective deferral max and Dell’s match. This is a great option for high-income households looking to save aggressively and wanting to maximize tax-free growth opportunities.

Learn More: Mega-Backdoor Roth 401(k) at Dell

Taxable Savings

Once you’ve maxed out tax-advantaged accounts, consider building a taxable investment account. While taxable accounts don’t offer the same tax benefits, they provide flexibility for saving toward financial goals and without contribution limits.

2. Consider Open Enrollment Options

Dell’s open enrollment lasts through November 8^th. Here are highlights of Dell’s available healthcare and other key enrollment options.

Healthcare Options

• A choice of medical plan options including the PPO (500 Plan) or Health Fund high-deductible health plan.
• Strong prescription drug coverage through CVS Caremark.
• Competitive dental and vision benefits.

Other Key Enrollment Options

• MetLife Legal Plan – New benefit alert! At $17 per month, Dell employees can have attorneys available for a broad range of needs, including estate planning. This is incredible value for anyone needing to update their financial plan.
• Basic life insurance and short-term disability benefits offered at no cost to you. This is especially critical to review Supplemental Life Insurance and Voluntary Supplemental Disability Plan policies for eligible employees.
• Family and caregiving benefits and pet insurance.

3. Review Dell’s Deferred Compensation Plan Enrollment

Dell’s Deferred Compensation Plan enrollment usually runs from late November to December.

Dell’s Deferred Compensation Plan offers a way for executives to defer taxable income, potentially lowering tax obligations in high-earning years. Eligible employees can defer 1% to 85% of base pay, commissions, performance bonuses, and all other eligible bonuses.

Deferred Compensation represents a major savings opportunity for some. However, it isn’t a fit for everyone. It’s critical to assess whether Deferred Compensation aligns with your risk profile, retirement timeline, cash flow, and overall tax strategy before enrolling.

Learn More: Deferred Compensation at Dell

4. Review Year-to-Date Tax Withholding

Dell’s stock appreciated ~296% between March 15, 2023 and March 15, 2024.¹  While Dell and Fidelity automatically withhold 22% of vested RSUs for federal taxes, this may fall short of your actual tax obligation, especially in a high-income year. Reviewing and adjusting your tax withholding now can help avoid surprises during tax season.

5. Utilize Available Reimbursements

Dell provides several reimbursement opportunities, which can help offset various expenses.

Health Rewards

Dell provides employees with up to $700 in health rewards by completing a biometric screening and online health review and up to $1,400 if a spouse or domestic partner participates.

Gym Membership

Dell reimburses employees with up to $500 for a broad list of eligible fitness reimbursement expenses.

Charitable Giving

Dell matches charitable donations dollar for dollar up to $10,000 annually per employee.

Every Dell employee that volunteers for 10 hours or more per quarter receives a voucher for $150 that can be donated to a charity of their choice.

Flexible Savings Account (FSA)

Ensure you spend and submit reimbursement claims for 2024 FSA expenses. The dependent care FSA has a ‘use-it-or-lose-it’ rule, forfeiting any unused funds at year-end. The healthcare FSA allows up to $610 to roll over into 2025.

Financial Planning, Tax Preparation, and Estate Planning

Are you fully utilizing Dell’s reimbursement program for executives? Receiving professional guidance can add value, especially in complex planning areas.

Planning Opportunity for Dell Employees

If you’re a Dell employee and have questions about year-end planning options, feel free to contact me at brianfry@safelandingfinancial.com.

More Resources

What Issues Should I Consider With My Employer-Provided Benefits? (Free PDF)
Financial Planning for Dell Employees
Restricted Stock Units at Dell
Life Insurance at Dell
Disability Insurance at Dell
Mega-Backdoor Roth Guide
HSA Guide + Strategy for Reimbursement
RSU Guide + Strategy After Vesting
Deferred Compensation Guide + Case Study

Sources

1: Dell’s Yahoo Finance Historical Data

Disclosure: Even though many of our clients are current and former Dell employees, Safe Landing Financial is not affiliated, associated, or endorsed by Dell. This information is supplied from sources that we believe to be reliable, however, we cannot guarantee the accuracy. All information is subject to change without notice. Please refer to your Dell benefits guide for up-to-date information.