Retirement Savings Plan-401(k) Plan
The Retirement Savings Plan 401(k) is a great way to put what you earn today to work for you. The 401(k) helps you save for tomorrow so you can plan for a secure retirement. You set aside part of your paycheck, and Advocate gives you matching funds to help your savings grow.
Your contributions to the plan are made through convenient automatic payroll deductions. Contributions must be made in whole increments of 1% of eligible pay.
There are two ways you can save through the 401(k) Plan:
- Traditional 401(k) savings are deducted from your eligible pay on a pre-tax basis, reducing your current taxable income and the income taxes you pay. When you receive a distribution from these contributions, you pay taxes on your original contributions and any investment gains these contributions have earned over the years.
- Roth 401(k) savings are deducted from your eligible pay on an after-tax basis, which means they are taxed as current income. When you receive a distribution from these contributions, you pay no taxes on your original contributions (as you’ve already paid taxes on these amounts) and you pay no taxes on any investment gains these contributions have earned over the years.
You can save with Traditional 401(k) savings or Roth 401(k) savings…or a combination of both. The choice is yours!
You can save up to 75% of your eligible pay through the plan each year (up to a specified dollar maximum set by the IRS). Starting in the year you reach age 50 and you will have a higher annual limit and can start making an additional catch-up contribution to the plan each year. (You will need to adjust your annual contribution percentage to maximize your annual retirement savings.) These limits apply to Traditional 401(k) and Roth 401(k) contributions combined.
Current contribution limits are available on here..
Advocate's Matching Contribution
For every dollar you save (up to 6% of your pay), Advocate will contribute an additional 50¢ up to the maximum of 3% of your eligible pay (or up to the maximum amount a plan participant can receive from Advocate under federal regulations, if less).
To receive Advocate’s matching contribution, you must work at least 1,000 hours during the year and be employed by Advocate on the last day of the year for which the contribution is made. Any matching contribution you’re eligible to receive for the year will be credited to your account by February 15th of the following year.
Note: If you retire at or after age 55 or if you die before year end, the 1,000-work-hours and last-day-worked requirements will not apply and the matching contribution – based on your contributions to-date – will be credited to your account the next pay period following your retirement, death or disability.
For example: How Your Savings Add Up Each Year
Here's an example of how the Advocate 401(k) Plan works for an associate who earns $55,000 per year, saves 6% of pre-tax pay and receives the maximum matching contribution:
|Your contribution – 6% of $55,000
|Advocate matching contribution – 3% of $55,000
|Total annual 401(k) Plan savings
Investing Your Accounts
How you invest your Advocate 401(k) Plan account is an important decision, which you should make carefully. It is your responsibility to thoroughly review all the information provided to you by the fund sponsor prior to making your investment choices. Advocate cannot advise you how to invest or take responsibility for the performance of any investment fund.