Welcome to the third edition of TriCom’s monthly newsletter! Every month, we’ll highlight a type of supplemental insurance or benefit that we provide for both our internal staff and all our consultants. To participate in National Financial Literacy Month, we’re putting the spotlight on our 401(k) plan.

What to Know about TriCom’s 401(k) Plan

At TriCom, you’re eligible to sign up for a 401(k) retirement savings plan at any time. As long as you’re 21 or older, you can begin contributing to your 401(k) whether you’re a full-time or part-time employee. There are no minimum hours requirements, and you can change your contribution rates whenever you need.

Here’s how it works:

• TriCom matches 100% of the first 3% you put in.

• TriCom matches 50% of the fourth percent.

• TriCom matches 50% of the fifth percent.

As soon as you start putting money into your 401(k), you’re 100% vested. That means you have complete ownership over both the money you contribute and our matching funds.

Personalized 401(k) Consultations on April 20

On Monday, April 20, Mark Pratt from Creative Planning will conduct one-on-one consultations over Zoom to help you with your retirement goals. He can answer any questions related to your 401(k) and offer personalized financial guidance to ensure you’re set up for retirement. Use the QR code below, or click here to sign up with your email address.

401(k) Terms to Know for National Financial Literacy Month

Financial jargon can be confusing, so for National Financial Literacy Month, we want to shed light on a few potentially puzzling terms that could be relevant to your 401(k).

Roth 401(k) - This is an employer-sponsored retirement plan that allows for contributions after taxation. It’s similar to a standard 401(k), but a Roth 401(k) means you can benefit from tax-free withdrawals when you retire.

Safe harbor 401(k) - A safe harbor 401(k) plan means your employer makes tax-deductible contributions on your behalf. TriCom does this through matching 100% of the first 3% and 50% of the following 2% of your 401(k) contributions.

Catch-up contributions - The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) allows people 50 or older to contribute beyond the maximum limit. These are called catch-up contributions. Speaking of which…

The SECURE 2.0 Act and Catch-up Contributions

Enacted in 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act is designed to improve U.S. workers’ retirement prospects. In December 2022, SECURE 2.0 was introduced with ongoing updates.

Starting Jan. 1 this year, the updated legislation mandates 401(k) contributions for participants who are 50 or older and earned more than $150,000 in Federal Insurance Contributions Act (FICA) wages from their current employer in the prior year to make all catch-up contributions as Roth. FICA wages are a payroll tax that funds programs such as Social Security and Medicare.

Here’s what that could mean for you:

• If you’re 50 or older, then catch-up contributions allow you to save greater than the typical IRS limit of $24,500.

• If you’re 50-59 or older than 64, then you can contribute up to $8,000 in catch-up contributions. For those who are 60-63, then you can contribute up to 150% of the standard limit: $11,250. This is to help you put away more money right before you reach retirement age.

• If you meet the wage requirements and don’t elect Roth (after-tax income) catch-up contributions, then they will be Roth by default.

To get answers to any more of your 401(k) questions, contact your HR representative or Creative Planning for more information. Visit yourbenefitaccount.net/cpretirement, or call 866-427-4015 to see how your 401(k) is holding up.