Glossary

A retirement savings plan that gives you a tax break either before you make your contributions (pre-tax contributions) or when you make eligible withdrawals (Roth after-tax contributions). Your Latham account includes:

• Your contributions
• The partnership’s contributions (if you are a staff employee or paralegal)
• Any investment earnings

Learn more about how your 401(k) works. 

A loan to a company or government that pays investors a fixed rate of return over a period of time. You can choose to add bonds to your 401(k) portfolio.

Are you at least age 50? (If you’re not, you can probably skip this one.)

If you are age 50 or older AND you contribute the IRS maximum to your 401(k) during the year (that’s $22,500 for 2023), you can contribute even more to your account (up to $7,500 for 2023). Catch-up contributions help put more money in your account as you get closer to retirement.

Earnings gained on your contributions, the firm’s contributions and investment growth. Your account can grow substantially, over time, as investment gains are realized not only on your and the firm’s contributions, but also on previous growth. Watch the Tale of Two Investors video. 

Stocks, bonds and other investment vehicles are combined to make an investment that is open to multiple investors. There are several types of funds, including mutual funds, money market funds and hedge funds. These funds can have a variety of objectives, such as short-term growth, long-term growth and/or dividend payment.

An overall increase in prices for goods and services and a decrease in the purchasing value of money. This is usually talked about as a percentage. As inflation rises, every dollar you own buys a smaller percentage of a good or service. Inflation can affect how much money you anticipate needing to save for retirement.

Money paid regularly at a certain rate for the use of borrowed money or for a delay in repayment of a debt. When you invest in a savings account or another type of savings vehicle, you will be paid interest for the use of your deposits. Investments in your 401(k) portfolio can earn interest, too!

Simple interest is paid on the principal of a loan or deposit. Compound interest is based on the principal investment and the interest that accumulates in the account.

You can make your own investment strategy and manage your 401(k) yourself, or you can let the professionals handle your investment choices for you. Latham has your back for any option you choose! Two good places to start are Ayco and Morningstar Investment Management*. Both provide investment management advice at no charge to you. Morningstar also offers other investment management services for a fee.

*To reach Morningstar, sign in to Schwab and click the Advice tab once on the Schwab homepage.

A pool of money contributed to by individuals, which is then invested and managed by a professional money manager. This is one type of investment that you choose from when deciding your 401(k) portfolio. Funds are generally made up of stocks and bonds.

The money Latham contributes to your 401(k) through the annual discretionary contribution. You are eligible if you are a staff employee or paralegal.

Charles Schwab is the trustee and recordkeeper for the Latham 401(k) Plan. The firm has contracted with Schwab to perform such tasks as keeping accurate account records, maintaining the plan website and making sure the transactions you request are performed quickly and accurately. Contact Schwab with questions about your account(s).

Money you contribute to your 401(k) that is deducted from your pay before federal and state (if applicable) taxes are taken out. Pre-tax contributions reduce the taxes you pay now.

The original amount of money you put into a particular investment, like the funds in your 401(k).

Your regular pay generally includes your base salary or hourly pay, overtime pay, bonus, incentive compensation, holidays, vacation, bereavement pay, jury duty and witness pay, sick pay and certain military pay you receive.

This is how much your 401(k) grows (or decreases). To prepare for retirement, you want to see an increase (positive return) in your 401(k) account as you contribute over time.

Money you contribute from your paycheck to your 401(k) after taxes have been deducted. Your contributions and earnings will grow federal and state (if applicable) income tax-free. You can take money out of your account tax-free if you are at least age 59½ AND your first Roth after-tax contribution was made at least five years ago.

The basic unit of ownership in a corporation. Sometimes this is called “common stock.” When you purchase a company’s stock, you’re purchasing a small piece of that company, called a share. You can add stocks to your 401(k) portfolio.

Basically, the ownership of your 401(k) account. At Latham, you vest in your 401(k) immediately. This means all the money you have personally contributed to the 401(k) is always yours and, if you choose, will go with you if you leave Latham. When Latham makes an annual profit sharing contribution to your account, that money is also immediately yours, as is the growth that is realized on your investments. See more details.