Highlights of Your AssetMark 401(k) Plan

No matter what you plan to do after you retire, you'll need money.

Your AssetMark 401(k) Plan is an easy way to save for your retirement. You won't get the benefits of that 401(k) plan, though, unless you participate. Here's some general information about 401(k) plans and why they are a good idea, and information abo ut your own AssetMark 401(k) Plan.

What is a 401(k) plan?

It's a savings plan that's sponsored by your employer, for your benefit. You can save money tax-deferred in your 401(k) plan.

What does "tax-deferred" mean?

It means two things:

	•	First, your 401(k) contributions are taken out of your gross income before you pay income taxes. That reduces your total taxable income. Joe, for example, earns $500 a week. He contributes $50 per week to his 401(k) plan. Joe, then, pays income taxes on only $450 of his gross weekly pay.
	•	Second, earnings in your 401(k) plan are tax-deferred. That means you don't pay taxes on the earnings on the investments in your 401(k) plan until you start making withdrawals from your plan. Usually, people make withdrawals when they retire. By then, they are often in a lower tax bracket than they are when they are working. Here's an example of the power of tax-deferred savings: If you put $100 a month into your 401(k) plan now and it earns a 7% rate of return, it could turn into $122,000 over 30 years. If you put that same $100 into a savings account (which is taxable), and it earns 7% interest, it would be worth around $50,000 in 30 years.

What happens if I change jobs?

Your 401(k) savings are portable. Your next employer may have a 401(k) plan that you can put your current 401(k) plan savings into. Or, you can roll them into an IRA to keep them tax-deferred until you retire.

Why should I start saving in our 401(k) plan now?

Common sense tells us that the longer we save, the more money we'll have when we retire. If you wait to start saving, you'll have to save more later to have the money you want and need at retirement. You can save a lesser amount now and still have substantial retirement savings because your savings will have more time to earn more money. Since 401(k) savings are tax-deferred, they will grow more quickly, too.

Here's an example of why it's wise to start saving early: Sue is 25 years old. She saves $100 a month in a 401(k) plan and earns a 7% annual return. She expects to have about $262,400 at retirement (at age 65). If Sue waits until she is 45 years old to save that $100 at a 7% annual return, she will have only around $47,400. If Sue waits just one year to start contributing, she will have "missed" contributing $1200. But by retirement, that $1200 could have turned into almost $19,000 in retirement savings. The cost of waiting one year could be as high as $19,000 – and that's a pretty powerful argument to save early and to watch your contributions build in a tax-deferred 401(k) plan.

Can't I rely on Social Security when I retire?

Perhaps. Social Security, however, may pay less than half of what you'll need in the future. A rule of thumb is that you'll spend an average of 75% of your preretirement income just for retirement living expenses. If you want to travel, help family members or just buy a boat and fish all day, you may want to have more than 75% of your preretirement income available.

How Can Your 401(k) Plan Help?

One of the ways to have a comfortable retirement in the future is by working and saving right now. Your AssetMark 401(k) Plan helps you save, starting today.

Ask your plan administrator how much you can contribute to your company's 401(k) plan. This contribution is called a "salary deferral." (There's a cap on how much you can contribute.) Your salary deferral will be automatically deducted from your paycheck.

You can decide how to invest your 401(k) contributions in the investment options offered by your plan. You might want to discuss your options with your investment or tax professional, if you use one.

You can find out information about your account and place trades when you need to either on the Internet or through a phone-based system called a Voice Response Unit (VRU). If you have questions about how to use the Internet or phone-based systems, go to Using the Account Login Feature or Using Phone Services. Information available on the Internet or through the VRU is updated every day the stock market is open.

You can also ask your plan administrator about the investment options available in your plan. Mutual fund prospectuses are available, and your plan includes collective investment funds called the Target Allocation Funds. For more information about the Target Allocation Funds available in your plan, click here.

How To Enroll

Just see your plan administrator for more information about how to start saving for retirement through your company's AssetMark 401(k) Plan.

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