401(k) Plan Tail—Wagging Features
• Saving is easy with automatic payroll deductions.
• You decide how much to contribute to the plan, up to
IRS limits.
• Your savings are deducted from your pretax pay,
which lowers your current taxable income.
• Your account grows tax-free until you start taking
withdrawals.
• Matching contributions from Petco help your account
grow faster.
• You decide how your savings are invested.
• You can stop or change your plan contribution at any
time by contacting Fidelity.
Who is Eligible?
All associates age 21 or older are eligible to join the
Petco 401(k) Plan after one year of service in which you
work 1,000 or more hours. You can join the plan at any
time after meeting the eligibility requirements. You can
enroll online through Fidelity Investments. See page one
of this magazine for enrollment quick steps.
Save with Pretax Contributions
Through automatic payroll deduction, you may
contribute between 1% and 60% of your eligible pay on
a pretax basis, up to the annual IRS dollar limit. (For
2012, the dollar limit is $17,000.) Pretax means the
money you save is deposited into your 401(k) account
lowering your taxable income. Since there’s no tax bite,
the cash you would typically pay toward taxes goes
into your retirement savings account instead.
How much should you save? As much as you can!
The more you save, the faster your account balance
will grow. And if you save at least 6% of your pay (3%
for Directors and above), you will maximize Petco’s
matching contributions added to your account.
Also, if you make the maximum contribution to your
plan account, and you’re 50 years of age or older during
the calendar year, you can make an additional “catch-
up” contribution of $5,500 in 2012. If you’re nearing
retirement and can stretch your budget, the catch-up
contribution is a wise investment for your future.
Petco 401(k) Plan for Retirement Bliss
One of the best paths to retirement bliss, according to many financial
planning experts, is participation in a company-sponsored 401(k) Plan.
With the Petco 401(k) Plan, the idea is to bury your bones now so you
can enjoy them later. When you save for retirement with a 401(k) Plan,
you brighten your future and at the same time benefit from tax savings
and company matching contributions.
6% Contribution
No Contribution
Annual Pay
$25,000
$25,000
401(k) Plan Pretax Contributions
$1,500
$0
Taxable Income
$23,500
$25,000
Taxes (assuming 25% tax bracket)
$5,875
$6,250
Saved for retirement
$1,500
$0
Tax Savings
$6,250 – $5,875 =
$375
$0
Pay Less Taxes with Pretax Savings
Saving money with pretax dollars lowers the amount of tax you will pay. Here’s an example that shows the
benefit of pretax saving. The example assumes an associate annual salary of $25,000, a 6% pretax contribution
to the 401(k) Plan and a 25% tax rate.
2
