How does a 401(k) or 403(b) work?

Your 401(k) salary-deferral contributions are automatically deducted from your paycheck each pay period. Typically, you can choose a percentage of your salary or a fixed dollar amount to be taken each pay period. This money is taken out before taxes are withheld from your paycheck, with the exception of Roth deferrals. The contributions are invested in the pre-selected fund set by your plan or at the employee’s direction into one or more funds provided in the plan. Often times, your employer will “match” your contributions, but are not required to do so. Any earnings in your account will also be tax-deferred.

How can I enroll in my employer’s retirement plan?

You can enroll online, via mail, or depending on the service provider, over the phone.

  1. Online you will need your personal information such as Name, Date of Birth, Social Security number and your address.
  2. You can fill out the Enrollment Form and provide it to your plan administrator.

*Some service providers can enroll you over the phone, but if not, they can guide you enroll online or by form.

**Please note it is helpful to have your contract/plan number and/or enrollment code (if applicable). All which you can get from your plan administrator.

How can I update my beneficiary?

It is very important to update your beneficiary(ies), so that you avoid any complications on the management of your assets. You can change your beneficiaries 3 ways.

  1. You can login to your service provider’s website and change beneficiaries online.
  2. You may call directly to your service provider and change beneficiaries over the phone.
  3. You can fill out the beneficiary form and provide it to your plan administrator.

Please note you will need the full name, date of birth, Social Security number and address of the individual or individuals you are trying to add.


How can I rollover an old account into my current account?

Consolidating your accounts allows you more investment flexibility as well as a better picture of your retirement goals. Follow these simple steps to begin the process:


  1. Confirm that your current retirement Plan accepts the type of retirement account you want to roll over. IRS Rollover Chat
  2. Request a direct rollover distribution from the previous retirement plan. Make sure the check issued is made payable to the Custodian or Trustee for the benefit of (FBO) your name. This ensures that the funds are moving from one bank to the next, disqualifying it as a taxable event.
  3. Contact your plan administrator and/or your service provider to request an incoming rollover form.
How can I access my account?

You can access your account balance one of two ways.

  1. Log into the service provider website associated with your Plan. You will need to register as a New User and follow the steps indicated on the page.
  1. The other way is to reach out to the provider directly via their Client Service Number.
How do I locate an old retirement plan?

The first step to contact your old employer and ask to check their plan records to see if you participated in their 401(k) Plan. If it’s not possible to get a hold of that employer, locate an old 401(k) statement to see if it contains contact information for the service provider that administered the plan. If none of those methods work, you can check The National Registry or the U.S. Department of Labor’s Abandoned Plan Database to see if you have any account balances left unclaimed.

How can I choose investment options?

Choosing how to invest your money is an important part managing your retirement Plan, whether you are just getting started or periodically checking in on your account. All plans have a default investment, which is where your funds will be invested unless you actively choose a different fund, or combination of funds. The default investment may be a Target Date Fund (TDF), a managed account, or something else.


If you would like guidance on reviewing your investment options, we are here to help! Set up an appointment through our online scheduler.

How can I make changes to my selected investments?

Making changes to your selected investments must be processed through your service provider, also called the record-keeper. You can process changes by logging into your account online, or over the phone by calling the service provider service center. When making changes, remember to change both your current allocation as well as future contributions, if appropriate. If you have additional questions about how to change your selected investments, please reach out Pensionmark.

How can I change the amount that I contribute to my retirement plan each paycheck?

Most retirement plans allow for participants to change the amount they contribute from their paychecks by logging on to the plans’ service provider website, or by calling the service providers’ participant services line.

Some retirement plans require that participants to reach out to the Plan Administrator within their employer to make a change to their contributions. In this case, participants are encouraged to reach out to their HR Department for more assistance.

How do loans or withdrawals work?

If you need more information about taking a loan or hardship withdrawal, please feel free to reach out to our Financial Wellness Center, and we can share with you details and provisions specific to your plan regarding loans and hardship distributions. Your retirement plan may or may not allow loans or hardship withdrawals.

To process the loan or hardship distribution, participants should reach out to the service provider on their retirement plan for assistance. Most service providers allow you to model the loan before processing via the phone or online.

What happens to my account when I leave my job?

When you leave your job, you have several options on what you can do with your retirement plan at your former employer. Depending on the rules to your employer's plan, you may be able to rollover your retirement plan to a new employer’s plan (make sure to check that your current employer’s plan allows you to make a rollover from another plan), rollover your retirement plan to an individual retirement account (IRA), cash out your retirement plan, or leave your retirement plan (if under$5,000, the former employer may not allow this option). With all options, there may be fees or tax implications that apply. Please make sure to speak with a Tax Consultant for your individual tax situation.

What is the difference between a traditional 401(k) and a Roth 401(k)?

The basic difference between traditional 401(k) and a Roth 401(k) account is the tax treatment. With a traditional 401(k) account, you make contributions with pre-tax dollars, so you get a tax break up front, helping to lower your current income tax bill. With a Roth 401(k), it's basically the opposite. You make your contributions with after-tax dollars, meaning there is no upfront tax deduction. However, Roth 401(k) withdrawals of both contributions and earnings are tax-free at age 59½ if you have held the account for five years in a Roth 401(k) account.

What is the maximum I can contribute to my Retirement Plan?

The IRS announces cost of living adjustments every year affecting dollar limitations for pension plans and other retirement-related items for that tax year. For 2023, The contribution limit for participants in 401(k), 403(b), and most 457 plans increased from $20,500 to $22,500. The catch-up contributions for employees 50 and over that participate in these plans increased from $6,500 to $7,500.


Source: IRS Notice 2022-55

What is Pensionmark’s role?

What happens if my plan is terminated?

When a Plan terminates, the accrued benefits of all affected employees must become 100% fully vested (Internal Revenue Code Section 411(d)(3)).

What are Required Minimum Distributions (RMDs) and how is the amount of RMDs calculated?

Required Minimum Distributions (RMDs) generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 72. The annual deadline for taking your RMDs is December 31. However, it’s possible to delay taking your first RMD until April 1 of the following year you turn 72.

Generally, a RMD is calculated for each account by dividing the prior December 31 balance of that IRA or retirement plan account by a life expectancy factor that IRS publishes in Tables in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). Choose the life expectancy table to use based on your situation

What is a Safe Harbor Plan?

A safe harbor 401(k) plan is similar to a traditional 401(k) plan, but, among other things, it must provide for employer contributions that are fully vested when made. These contributions may be employer matching contributions, limited to employees who defer, or employer contributions made on behalf of all eligible employees, regardless of whether they make elective deferrals. The safe harbor 401(k) plan is not subject to the complex annual nondiscrimination tests that apply to traditional 401(k) plans.

What is a vesting schedule?

“Vesting” simply means ownership and refers to how much of the assets in your account you own. You are always 100% vested in your salary-deferral contributions. If your employer makes contributions to your account, you will earn ownership rights to them, including any earnings they may generate according to the vesting schedule set by the employer. These schedules can range from 100% vesting after 3 years of service to a 6-year graded vesting schedule. Always refer to your Summary Plan Description for details.

What is asset allocation?

Asset Allocation is the process of dividing an investment portfolio among different asset classes, such as stocks, bonds, and cash. The mix of assets in your portfolio that will work best for you will largely depend on your time horizon, risk tolerance, and personal goals.

What does it mean to rebalance my portfolio?

Rebalancing is simply bringing your portfolio back to its original allocation. Over time some of your investments may become out of alignment with your investment goals. Let’s say your original allocation mix was a 50/50 split between stocks and bonds. Over the course of 2 years, stocks outperformed bonds, leaving you with a portfolio that’s 70% stock and 30% bonds. By transferring assets from your stocks over to your bonds, you can set your allocation back to its original mix.

Still have questions?