Get Everything From Your Workplace Plan

The story: Nora’s plan makeover

On a break at the clinic, Nora reads a workplace retirement plan summary and circles three things to fix.

1. Narrator: Nora has a 401(k) at the clinic but hasn’t looked at it in years. On a break, Nora opens the plan summary.
2. Nora: The clinic matches up to 5% of my pay. I only save 3%.
3. Narrator: Saving 2% more would bring in the rest of the match, money Nora is leaving on the table.
4. Nora: And this fund charges almost ten times the fee of the target-date fund next to it.
5. Narrator: Last, the beneficiary line is blank. That form decides who gets the account, so Nora fills it in.
6. Nora: Ten minutes, three fixes. That was easier than I expected.
7. Narrator: Take the full match, keep it simple, keep fees low.

What you’ll learn

1. Get the full match, and know when it vests

   Many people save at least enough to get the full employer match, since it’s money added on top of pay. Check the match formula and the vesting schedule, which says when the match becomes fully yours. The yearly limit on what you can save is $24,500.

   Example: “100% of the first 5% you save” means saving 5% of pay brings in another 5%.

2. Simple can be enough

   A target-date fund holds a mix of stocks and bonds and shifts it slowly safer as its year gets closer. It’s a one-fund choice many plans use as the default. Read the yearly fee notice and compare expense ratios: lower fees leave more for you.

3. Loans and hardship withdrawals

   A plan loan or a hardship withdrawal takes money out of growth. A loan can come due quickly if you leave your job, and early withdrawals before 59½ often owe tax plus a penalty. Many people use them only when truly needed.

4. Keep your beneficiary current

   The beneficiary form decides who gets the account if you die, even over what a will says. Check it once a year, and update it after a marriage, a divorce or a new child.

Key words

match formula

how much your employer adds for what you save, such as 50% of the first 6%

target-date fund

a one-fund mix that shifts slowly safer as its year gets closer

expense ratio

a fund’s yearly fee, as a percent of what you have in it

plan loan

borrowing from your own workplace plan, paid back from your paychecks

Also called: 401(k) loan

Common questions

Is a 403(b) or 457 plan different?

They’re workplace plans for schools, nonprofits and governments. The ideas in this lesson, like the match, fees and beneficiaries, work the same way.

What if my job has no match?

Saving through the plan can still bring tax benefits. An IRA is another way to save with a tax break.

Remember this

Take the full match, keep it simple, keep fees low.

Try it: Give your plan a makeover

1. Find your plan summary and your latest statement.
2. Check that you save enough to get the full match, and note when it vests.
3. Look up the fee (expense ratio) of each fund you hold.
4. Check that your beneficiary is current.

No account needed: your plan summary and your latest statement.

Live facts

Numbers that change over time, with when they were last checked and where they come from.

• 401(k) yearly limit

  $24,500

  What an employee can put into a 401(k), 403(b) or most 457 plans in a year, before catch-up

  As of 2026

  Source: IRS.gov(opens in a new tab)

• Early-withdrawal penalty ends at

  59½

  Retirement-account withdrawals before this age usually owe an extra 10% tax, with some exceptions

  As of February 8, 2026

  Source: IRS.gov(opens in a new tab)

• Rules for loans from retirement plans

  Source: IRS.gov(opens in a new tab)

• How to read your plan’s fee notice

  Source: U.S. Department of Labor (EBSA)(opens in a new tab)