Your Hilcorp Benefits & 401(k)

Managing your Hilcorp 401(k) Savings Plan is a key component in planning for your retirement. Understanding how your plan works can help maximize your retirement savings. You can contribute to the 401(k) plan on both a Pre-Tax and Roth basis. Additionally, every dollar you contribute into your 401(k) is matched by Hilcorp up to 6% of your salary.

Eligible employees will be automatically enrolled into the plan with an initial 6% contribution rate. This rate can be modified at any time up to a maximum of 75% of your salary. As of 2023, if you are under the age of 50, the IRS caps contributions at $22,500. If you are over the age of 50, you can contribute up to $30,000.

Why You Should Reconsider Investing in Target Date Funds

Capstone Wealth Advisors currently does not recommend investing in any of the Target Date investment option offered inside the plan due to several issues relating to the lack of public disclosure for these options. Additionally, the Target Date options offered within the plan are investment funds that own other funds, this means you are paying multiple layers of asset management fees for every fund the Target Date option invests in. Because of this, we are not currently recommending you invest in these funds.

Can you rollover funds into an IRA?

Rolling funds out of your Hilcorp 401(k) plan is currently not permitted while you are still employed with exception of those who are over the age of 59 ½. Once you are separated from the company, you will be allowed to rollover the entire balance of your vested 401(k).

401(k) Loan Opportunities

Plan loans are allowed up to a maximum of $50,000 or half of your account balance, whichever is less. The 401(k) loans interest rate varies based on the current interest rate environment. Only one outstanding loan at a time is permitted.

What does “vesting” mean to you?

The term “vesting” refers to the portion of company matching dollars that are legally yours to keep. The longer you remain an employee of Hilcorp, the higher your vested amount will be. For example, an employee who has worked for Hilcorp for more than 5 years is 100% vested and entitled to receive all company match dollars contributed into his or her 401(k) plan. Conversely, an employee who has less than one year with Hilcorp is 0% vested will not receive any of the company matching dollars if separated from the company before their first anniversary of employment. Vesting percentages are based on years of employment with the company at the time of separation and based on the following schedule.

Looking for more ways to save for retirement?

Since the Hilcorp plan currently does not allow employees to make “After-tax” contributions and does not offer a pension plan like some large oil and gas companies, this limits your ability to save within the T.Rowe Price Account. Our team has diligently prepared and established a plan to help ensure you are maximizing your benefits with both pre-tax and post-tax contributions, we encourage you to reach out and schedule a time to talk about these options as you continue to prepare for retirement.