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Global Payments Inc. 401(k): Everything You Need to Know

Global Payments Inc. 401(k): Everything You Need to Know

May 02, 2024

Having a 401(k) plan is a great benefit, but as a participant, it's not always clear how to make the most of it. Here's everything you need to know to begin maximizing your participation in Global Payments Inc. 401(k).

Before we get started, I am a flat fee financial advisor in Georgia and Alabama, serving employees of local companies in those states and across the country. Click here to join my newsletter list and receive updates when I publish other blogs about Global Payments retirement benefits and other topics related to retiring in Georgia and Alabama.

How to get started

The first thing a plan participant should do is review the Summary Plan Description (SPD) which describes your rights, benefits, and responsibilities in understandable language. New employees must receive a copy of the SPD within 90 days after becoming covered by the plan. The SPD will include such things as:

  • The name and type of plan the company provides.
  • The Plan's eligibility requirements.
  • A description of benefits and when participants have a right to those benefits.
  • The source of contributions to the plan and the methods to calculate contributions.
  • A statement about whether the plan is covered by termination insurance from the Pension Benefit Guaranty Corporation.
  • Statement of rights available to plan participants.

As you begin to familiarize yourself with the SPD, participants are often looking to find answers to these common questions:

What is the most I can contribute to my Global Payments 401(k)?

The 2024 contribution limit for elective deferrals is $23,000. This does not include any matching contributions by the company, any mandatory contributions, or any allocations or forfeitures. Also, if you're 50 or older, you can contribute an additional $7,500 as a "catch-up" contribution. 

What percentage of my salary should I contribute?

It's common to recommend a beginning target percentage of saving 10% of your salary. However, at a minimum, you should contribute enough to take full advantage of the company's matching program. In other words, if the company is offering to match 5% of your salary, then 5% of your salary is the bare minimum to contribute.

How do matching contributions work?

Typically, the matching program involves the company matching a certain percentage of your contributions, up to a maximum percentage of your salary. For example, the company may provide a matching limit up to 100% of your contributions, capped at 7%. This means that if you contribute 7% of your salary to your 401(k) with Global Payments, then the company will put in 7%, for a total savings rate of 14% of your salary.

How do 401(k) investments work?

When you contribute to your 401(k) account, you are given several investment options to choose from. Typically, these include an assortment of stock and bond mutual funds, as well as target-date funds which are essentially designed to match a participants age with a particular model portfolio allocation between stocks and bonds.

What's the difference between a Traditional 401(k) and a Roth 401(k)?

Until 2006, there was only the traditional 401(k) option available. The original intention of the 401(k) when it was created in the 1970's was to allow pre-tax investments which means you receive an immediate tax break for any amounts you contribute. The Roth 401(k) on the other hand, allows for contributions that are made after-tax. This means you don't get any tax deduction now for your contribution, but you are able to make withdrawals later without having to pay any tax. Someone who anticipates being in a higher marginal tax bracket in the future may find it useful to contribute to the Roth 401(k). 


As plan participants grow in their career and as their family circumstances change, different questions seem to arise with Global Payments Inc. 401(k) participants. Questions that may be more complex such as:

What is a 401(k) loan?

Many employers offer 401(k) plans that have a loan future. You can review your SPD to confirm the most up to date rules on the loans for the Global Payments, Inc. 401(k) plan. Typically, these loans allow participants to borrow money from their accounts for as much as $50,000 or half the account's value. Participants typically must pay the loan back, with interest, over a period of five years. Loans for things like purchasing a primary residence may have longer terms.

What if I need money from my 401(k) before I retire?

For any amount you contribute and for any matching amount that you are vested, you can withdraw at any time. However, if you take money out prior to age 59 1/2 without a qualifying exception, you'll have to pay a 10% penalty in addition ordinary income tax on the withdrawal.

What if I can retire before age 59 1/2?

In this case, there are two main options that allow for 401(k) withdrawals before reaching the standard retirement age. First, if you're at least 55 and no longer wok at Global Payments, Inc., you can withdraw from your 401(k) without penalty. Or you can begin withdrawing at any age if you agree to take a series of what are known as "substantially equal" periodic payments.

I am currently working and contributing to my Global Payments, Inc. 401(k). I would also like to contribute to an IRA. Can I do that?

Yes! Participating in the company's retirement plan never prevents you from being able to make an IRA contribution. But, depending on your total income, your contribution may not be tax deductible.

Remember, participating in your 401(k) plan is an efficient way to help you reach your retirement goals. But it's only a piece of one's financial planning puzzle. This is where we come in. We can help you assess your entire financial situation to ensure you're not only maximizing the benefit of your 401(k) but also making even smarter decisions in all areas of personal finance.

Conclusion

Understanding the Global Payments 401(k) plan is the first step in making smart retirement decisions. If you are thinking about retiring in Georgia or Alabama, or just want to talk to a flat fee advisor serving pre-retirees and retirees across the country, let's set up a time to speak.