What is a401(k) plan?

With pension plans becoming increasingly rare (46% of companies offered them in 19801but that fell to 11% by 20212), employer-sponsored 401(k) plans are now the go-to way to save for retirement. You simply put a percentage of your paycheck into an account to help you save for the kind of retirement you want—some employers will even give you what is essentially free money by matching your contributions. Enrolling in a 401(k) plan is a smart way to make your retirement plan even stronger, and the sooner you start, the more time your money will have to grow.

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Which 401(k) plan is rightfor you?

Typically, employers will offer two plan types. Here's the difference between them and how they can help you save for the retirement you've always dreamed of.

Traditional 401(k)

Use pre-tax dollars (meaning before taxes are taken out) to not only save for retirement, but also reduce your taxable income today. Once you start making withdraws in retirement, you'll be taxed at your income level then which may or may not be lowerthan today.

Roth 401(k)

You can make contributions that will be taxed at your current income level, but once you start making withdrawals in retirement, they'll typically be tax-free. This option may be better for people who expect to be in a higher tax bracketin retirement.

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How can a 401(k) plan fit into yourretirement plan?

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The best retirement plan will generate the right amount of retirement income needed to live the way you want. While an employer-sponsored 401(k) plan can help, it's not the only way. Depending on your goals, your plan could also include diverse sources such as IRAs, health savings accounts, the cash value of a life insurance3policy, annuities, social security, savings, and investments. Our financial advisors will help make sure that you have the right tax-efficient income strategies and financial protection needed to retire the way you've always dreamed of.

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401 (k)计划:sma的关键rtfinancial plan

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At Northwestern Mutual, we see your 401(k) as just one part of your overall financial plan. Through your financial advisor, you'll have access to other financial options, includinginvestmentsfor growth,insurancefor protection, andannuitiesfor more financial flexibility. Each is designed to reinforce the other so your personalized plan can work its hardest for you. Here's what our version of financial planning can dofor you:

  • Help grow your money with investments for today andin retirement
  • Make the most of what you have with recommendations for saving and payingdown debt
  • Protect everything you've worked sohard for

The NorthwesternMutual difference

Top 10 ranked investment service

We're one of the top U.S. Independent Investment Broker-Dealers.4

Ranking for Northwestern Mutual Investment Services LLC, Financial Advisor magazine and InvestmentNews, April 2021

4.9M+ clients at Northwestern Mutual

The number of people we're proud to call clients, and who put their trust in us.

164+ years strong through depressions, downturns, and pandemics

The number of years we’ve been there for our clients—through depressions, downturns, and pandemics.

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Take the next step toward yourfinancial plan

Our advisors are here to walk you through it and will be there every step of the way. Ready to turn someday into today?

It's easy to get started—no commitment, justa conversation.

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