You work hard for your money. Make it work for you.
Social security and personal savings is typically not enough to ensure your financial future. One way to build your retirement nest egg is by maximizing the benefits of your 401(k) plan.
Pre-Tax Contributions
Depending on how much you contribute, the tax benefits can mean hundreds or even thousands of dollars in tax savings each year.
Tax-Deferred Growth
The growth of the money in your 401(k) is not subject to immediate taxation. This allows for more rapid growth of your savings inside the 401(k) plan.
Money you contribute to your 401(k) is not taxed until it is withdrawn after retirement. At retirement, you will likely be in a lower tax bracket than in your peak earning years, so you will likely pay fewer taxes.
| After Tax Outside Your 401(k) Plan | Pre-Tax Inside Your 401(k) Plan | |
|---|---|---|
| Savings | $1,000 | $1,000 |
| Taxes 28% | -$280 | $0 |
| Net Savings | $720 | $1,000 |
| Investment Growth at 7%* | $50 | $70 |
| Taxes on Interest | -$14 | $0 |
| Net Investment Gain | $36 | $70 |
| Total Amount Accumulated | $756 | $1,070 ($315 or 41.5% more) |
*Hypothetical return for illustrative purposes only. Your actual return will vary and may be lower. You pay income taxes when you withdraw your funds. Example assumes a 28 percent tax bracket. If your enrollment form includes a Roth 401(k) deferral option, you may designate all or a portion of your contribution as a Roth 401(k) deferral. In a Roth 401(k) account, your investments will grow tax-free. You pay taxes on your deferrals up front and pay no taxes when you become eligible for distribution after age 59 1/2. You may not defer more than the maximum amount allowed by the IRS between both the Roth and Traditional 401(k) accounts. Your financial advisor can help you determine if it makes sense for you to make Roth 401(k) contributions to your account.
Long-Term Compound Growth
Investing now can increase your savings by thousands when you retire.
| Years | 4% Return | 7% Return |
|---|---|---|
| 10 | $36,216 | $42,995 |
| 15 | $57,061 | $74,104 |
| 20 | $82,423 | $117,737 |
| 25 | $113,279 | $178,935 |
| 30 | $150,821 | $264,767 |
| 35 | $196,496 | $385,151 |
| 40 | $252,066 | $553,997 |
This is a model showing power of compounding and does not reflect actual Slavic401k client history or imply that the terms will be achieved. The chart above illustrates the long-term effect of different rates of return and compound growth. It uses an initial investment of $5,000 with annual contribution of $2,400. Assumed rates of return are four percent and seven percent. Your actual rate of return will vary with market conditions.
Ready to enroll in your 401(k) plan?
Helpful Resources
How to Enroll in your 401(k)
Enrolling in your 401(k) plan is easy. Watch this short video for an overview of how your plan works and how to enroll.
401(k) Employee Enrollment Guide
Maximizing the benefits of your 401(k) plan is an important financial step for your future. This guide will help.
401(k) Glossary Guide
The financial world is full of confusing acronyms and words. This guide will help you familiarize yourself with language you may see while planning for your future.
Retirement Calculators
Unsure of how much to contribute or how it will affect your paycheck? Use these calculators to answer these questions, plus more.
Plan Features
Dedicated Customer Service
Real people with real service and support. Really.
Experience Enterprise Security
Advanced security to protect your hard-earned savings.
Loan & Hardship Distributions
Experiencing a financial hurdle? We can help.
Rollover of Previous Plans
Have a 401(k) from a previous employer? We can help roll it over.
Helpful Tools
Technology
We have automated investing, a mobile app and more to help make managing your money more efficient.
Email Express
Email Express provides you with weekly insights into your account balance as well as commentary on market fluctuations that could directly impact your portfolio’s performance.
Investment Education
Castle Rock PEP partner, Slavic401k, has a blog is full of helpful insights, budgeting tips, savings methods and more. Subscribe to the blog and learn how to get the most out of your money.
