What is a 401(k)
This employer-sponsored retirement account can help build and create choices for your future self by saving money—tax free—from your paycheck. Due to the value of compounding interest, the sooner you participate in a 401(k), the better.
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Eligible employees can invest for retirement while receiving certain tax advantages. You may start making pre-tax contributions into the plan on the first day of the month following completion of six (6) months of service.
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Pre-tax vs. Roth 401(k): What’s the difference? – If you contribute to your 401(k) pre-tax, your contributions will be taken out before taxes each pay period. However, you will have to pay taxes on the funds when you withdraw them during retirement. If you choose the available Roth 401(k), contributions will be deducted from your paycheck after taxes—so you will not pay taxes when you withdraw during retirement. Once you retire, you might be in a higher tax bracket, so contributing after taxes now could save you money in the long run.
Contributing To The Plan
The decision about how much you should contribute, up to the maximum set annually by the IRS, should be guided by your retirement savings goal. How much money you will need in retirement depends on when you plan to retire, how much of your current income you would like to replace and how much you want to rely on Social Security.
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If you are age 50 or older this calendar year and you already contribute the maximum allowed to your 401(k) account, you may also make a “catch-up contribution.” This additional deposit accelerates your progress toward your retirement goals. Refer to IRS guidelines for maximum annual contribution limits.
How Much Should I Be Saving
Industry standards suggest saving, at a minimum, 12% to 15% of your income, inclusive of KEG 1’s generous matching contribution. If you cannot afford to save that much right now, at least make sure to be saving up to the matching amount so you are not leaving free money behind.
Investing In The Plan
It is up to you how to invest the assets in your account. The KEG 1 401(k) Plan offers a selection of investment options for you to choose from. You may change your investment choices any time.
Vesting
The term “vested” refers to how much of your 401(k) funds you can take with you if or when you leave KEG 1. With our vesting schedule, you are always 100% vested in your accounts.
