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  • Writer's pictureStephen Boatman

Stryker's 401k Plan: 5 Key Features

Stryker’s 401k plan is held at Vanguard (good news) and has solid investment options available to its users. It has both a Roth 401k and a traditional 401k option, which is great for tax diversification. However, five other financial planning strategies are available to maximize the potential of this 401k plan. Those strategies include…

  1. Mega Back Door Roth 401k contributions

  2. Net Unrealized Appreciation (could save over $50,000 in taxes, if not more)

  3. Discretionary company match + 4% match

  4. Vesting Schedule

  5. 401k loans and how to use them

Stryker 401k: Mega Back Door Roth 401k

This strategy allows Stryker Medical employees to contribute another $20,000-$30,000 to their Roth 401k above the maximum $23,000 in 2024. 

Example: Kyle (32/single), a sales rep at Stryker, earns $230,000, withholds 10% of his pay or $23,000 for his Traditional 401k, and receives the 4% match of $9,200. He has maxed out his deductible contribution for 2024 and received his company match, giving him a total 401k contribution of $32,200. However, there is an underlying 401k contribution limit of $69,000 in 2024. He still has $36,800 he can contribute into his 401k ($69,000 - $32,200). He could make a non-deductible contribution of $36,800 into his 401k and complete a Roth conversion of these dollars. Allowing him to place $36,800 into his Roth 401k to enjoy tax-free growth between here and his withdrawal date.

This strategy is only for those with a good chunk of excess cash flow and for whom it makes sense based on their tax bracket and retirement goals. I’d recommend talking with a fiduciary financial professional before pursuing this strategy.

Stryker 401k: Net Unrealized Appreciation

This strategy can shift the tax on capital gains within company stock from being taxed as income when withdrawn from the 401k to being taxed at capital gains rates. It is only useful if you have a large amount of company stock within your 401k with large underlying gains. And seeing how Stryker automatically purchases 2% of its stock as a part of their 401k match, there are a lot of candidates for this within Stryker. Especially if you have been with the company for 20+ years.

2024 Capital Gains Tax Brackets

NUA Requirements

  1. The employee must have reached a triggering event, such as turning 59.5 years old, separation of service, or death. Only one triggering event is required, not all three.

  2. The distribution must be made in a lump sum in one calendar year. However, this calendar year doesn’t need to be the same year as the triggering event.

  3. The distribution must be made “in-kind,” meaning you can’t sell the company stock within the 401k and then transfer the cash. The actual company stock must be transferred from your 401k into an individual brokerage account. You may select specific tax lots; you don’t have to transfer the entire amount of company stock.

Example: Boyd is 62 with $500k in Stryker stock within his 401k. He is retiring this year and looking to pursue the NUA strategy next year. After he leaves the company in 2024, he waits until next year, when his income will be close to zero, and rolls over all of his 401k assets except his company stock into an IRA as he had only traditional 401k assets. His company stock rolled into an individual account in the same year. Luckily for Boyd, his cost basis on the Stryker stock is only $50,000. In this scenario, he would pay income tax of 10%/12% on the full $50,000 basis that was transferred over in the year of transfer. The $450,000 will now be taxed at capital gains rates instead of income tax rates upon the date of sale. This means that if he starts selling this stock in future years and keeps his income low, he could pay 0% tax on his company stock gains, saving him tens of thousands of dollars in taxes.

$450,000 * 12% income tax rate = $54,000 in taxes


$450,000 * 0% capital gains tax rate = $0

In the example above his income tax bracket is 12% higher than his capital gains tax bracket which would save him $54,000.

Let’s assume Boyd is in the 32% tax bracket in retirement and compare the income tax bracket vs. capital gains rate savings when the gap between brackets is 17%.

$450,000 * 32% = $144,000

$450,000 * 15% = $67,500

Total tax savings of $76,500.

Net Unrealized Appreciation Process

This is a complicated strategy, and there are many variables to consider, such as social security, upfront tax hit of basis, other income sources, timing with a large deduction through a cost segregation study or bonus depreciation, and many more I won’t bore you with. I highly recommend talking to a fiduciary financial professional who’s completed this in the past instead of trying to DIY, as one mistake could cost you tens if not hundreds of thousands of dollars, depending on your scenario.

Stryker 401k: Match

Stryker has a company match of 50% of your contributions up to 8%, capping the employer contribution at 4%. 2% of this match automatically goes to purchase Stryker stock that can be sold immediately or held. On top of this match, Stryker also completes a discretionary match given after year end. This match could be 5% up to $100,000 of earned income or something along those lines. However, it’s important to keep this in mind and account for this second discretionary match if pursuing something like the mega backdoor Roth contribution.

Stryker 401k: Vesting Schedule

You can see the vesting schedule below. This means that if you leave the company before those vesting dates, you will only keep that portion of the company match within your 401k. So, if you work for Stryker for less than two years before leaving, you will be able to keep your employee contributions but 0% of the employer matching or discretionary contributions. After two years, you will keep 100% of employee contributions and 20% of employer contributions, and so on. Vesting can bridge gaps if you leave and come back or have a sabbatical. You can pause your vesting schedule and start where you left off if you return to the company.

Stryker 401k Vesting Schedule

Stryker 401k: Loan

401k Loans can be useful tools for short-term financing needs, such as a down payment on a home while you sell your other home.

  1. The maximum loan amount is 50% of your vested 401k value and caps out at $50,000.

  2. The interest rate is Prime + 1%. However, you pay the interest to yourself so it really ends up being a 0% interest loan.

  3. The max term is 54 months unless used to purchase a primary residence where the term can jump to 174 months.

  4. The loan MUST be paid back before you leave the company. So if you have a $30k loan and are fired, you must repay that loan immediately, or they will pull from your 401k assets to repay the loan.


Stryker has a great 401k plan with robust tax opportunities available to it’s employees. If you have any questions regarding this 401k plan or would like to discuss anything not pointed out in the text above then give me a shout. Have a great week and don’t forget to do something nice for a family, friend, or yourself if you can manage it.

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