Use this article to understand what to consider before stopping your 401(k) contributions and how to pause, stop, or resume them in your Gusto Retirement account.
You can stop or pause your 401(k) contributions at any time, but it's worth considering a few things first.
Your 401(k) offers tax advantages that other accounts don't:
Pre-tax contributions are deducted from your paycheck before taxes, which can lower your taxable income for the year. Any earnings grow tax-deferred — you won't pay taxes on them until you take a distribution (withdrawal).
Roth 401(k) contributions are made after taxes, but your earnings may be distributed to you tax-free if you meet certain requirements.
401(k) accounts have higher contribution limits than individual retirement accounts (IRAs), so you can save more.
Your account assets may be protected in the event of bankruptcy or creditor judgments.
Employer match and profit sharing — if your employer offers these, stopping contributions may mean you miss out on what is essentially free money. Those contributions also won't be taxed until you take a distribution.
Pro tip: Instead of stopping entirely, consider temporarily lowering your contribution rate. Check in every few months to reassess what you can afford to contribute.
If you received an enrollment email from Gusto Retirement and want to opt out, you still need to set up your account first—even if you do not wish to participate.
Once your account is established, follow these steps to stop or pause your 401(k) contributions:
Sign in to your Gusto Retirement dashboard and go to your contributions using one of these options:
Sign in to Gusto and go to Benefits > Active Benefits > 401(k) > Manage.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
Sign in directly at the Gusto Retirement sign-in page.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
Open the Gusto Retirement mobile app and sign in.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
Change the contribution rate to 0% or $0 for both Traditional 401(k) and Roth 401(k).
Click Save changes.
Your contributions will stop with the next payroll run after the change is processed.
Once you stop your payroll contributions, you will no longer be eligible to receive any applicable employer match.
Pro tip: Contact your employer or payroll department directly to confirm when your company runs payroll so you can time your changes accordingly.
You can adjust your contribution rate and type at any time.
To start contributing again, follow the same steps above and enter your desired contribution rate.
Important: If you change your contribution rate too close to when your employer runs payroll, your new rate may not take effect until the following payroll run.¹
¹ If your employer uses a payroll provider other than Gusto or a Gusto Embedded provider (HiBob or HR for Health), there may be a delay in your contribution rate change being applied within payroll. For last-minute changes, check with your company's payroll department to confirm that the contribution rate change is reflected in payroll before they process or upload payroll.