Frequently asked questions

Employer-sponsored retirement plans can help you prepare for the future. Here are some basic questions and answers to help you understand your plan.

What is a 401(k) plan?

Workplace plans, such as 401(k), 403(b) or 457 plans, allow you to set aside money from your paycheck to save for retirement. Most offer several investment options.

Why should I invest in my workplace plan?
  • Convenient automatic deductions
  • Consistent savings
  • Reduced taxes
  • Tax-deferred growth

Many employers also match a portion of what you save through the plan. If yours does, be sure to take advantage of this “free” money!

How do I make retirement plan contributions?

It’s simple. Once you’re eligible and you enroll, your employer will deduct the amount you choose from your paycheck and place it into your plan account.  

How much can I contribute to my workplace retirement plan?
Can I change or stop my contributions to my plan?

Yes. Check with your employer to find out how often you can change or stop your contributions. You may want to increase your savings when you get a pay increase or other extra cash.

How is my retirement account invested?

Most plans allow you to choose from several investment options, which often include mutual funds.

How does participating affect my taxes?

You can contribute to your employer’s plan on a pretax basis. You don’t pay taxes on your savings—or earnings—until you withdraw them. Your plan also may allow you to make after-tax or Roth contributions, which provide tax advantages later. Withdrawals before age 59 ½ may be subject to a federal penalty tax.

How can I access the money in my retirement account?
  • Before retirement, you may be able to take a withdrawal, subject to certain restrictions. See your Summary Plan Description for details.
  • At retirement, you can begin taking distributions.
  • Your employer also may allow you to take a loan from your account.
What happens to my money if I change jobs?
  • Your employer may allow you to leave your money in its plan.
  • You can roll over your account to your new employer’s plan or an Individual Retirement Account (IRA).
  • You can take a lump-sum distribution. You’ll pay regular income tax and special federal withholding taxes on your distribution. Withdrawals before age 59 ½ also may be subject to a federal penalty tax.
What happens to my account if I die before retirement?

If you die before you begin taking distributions, your account will go to the people you designate as beneficiaries. 

How do I get started?

Check with your Human Resources department for more information about your workplace retirement plan, or learn more on how to enroll