Retirement plans can be very similar, but there can be important differences between one company’s plan and another’s. It is key to your financial future to make the most of your retirement plan by learning the ins and outs before you enroll.
Ask these questions when starting a new job or enrolling in a retirement plan.
Figuring out the basics
- What type of plan is offered, and what are its features?
- When can you begin contributing?
- Does the company match your contribution – and how much is the match?
- How long does it take to be vested in the plan? Is there a Roth option?
- What is the maximum annual contribution?
- Do contributions lower your taxable income and have the opportunity to grow tax-deferred?
Managing your plan
- What are your investment options?
- Can you select your own investments?
- How often can you change your investments to match your current risk comfort level?
- Is there a catch-up provision to allow older workers to make larger contributions?
- How can you obtain a schedule and explanation of the plan management fees?
- Who are the fund managers, and how have they performed in the past?
Tracking and accessing your funds
- Are statements, tools and retirement planning resources available online?
- Can you make withdrawals during a financial hardship or an unforeseeable emergency?
- What are the conditions for borrowing from the account, if it’s allowed?
- At what age do payouts start?
- When do you have to start taking payouts?