Slide 1: Title Slide - Employer-Sponsored Plans: Your Job's Retirement Benefit)

Employer-sponsored retirement plans are often the most powerful tool for retirement savings, acting as a "career supercharge." Unlike individual savings methods such as IRAs, these plans, offered directly through your job, simplify saving by making it automatic: contributions are deducted directly from your paycheck before you even see the money, ensuring consistent and effortless saving.

Slide 2: Most Common: The 401(k))

For those working at for-profit companies, the 401(k) is the most common employer-sponsored retirement plan. Non-profits, schools, and the federal government typically offer similar plans, such as the 403(b). These plans boast significantly higher contribution limits than IRAs; in 2025, individuals under 50 could contribute up to $23,500. We'll primarily focus on the 401(k) in our discussion

Slide 3: How 401(k) Contributions Work)

So, how does a 401(k) actually work? It's pretty straightforward. You decide on a percentage of your salary – say, 5% or 10% – and that money is automatically deducted from your paycheck. It's brilliant because you don't even have to think about it! Now, you usually have two main ways this money can go in:

• Traditional 401(k): Your contributions are made before taxes are calculated on your paycheck. This means your current taxable income is immediately lowered, which can save you money on your taxes right now. The money then grows over time, and you pay taxes when you take it out in retirement.

• Roth 401(k): (If offered by your employer) This is similar to a Roth IRA. Here, your contributions are made after taxes. But the huge benefit? Your money grows tax-free, and when you take it out in retirement – assuming you follow the rules – it's completely tax-free!

Slide 4: Traditional vs. Roth 401(k) (If Offered))

Let's quickly compare these two, just like we did with the IRAs.

• With a Traditional 401(k), you get the tax break today on your contributions, your money grows tax-deferred, and you pay taxes when you withdraw it in retirement.

• With a Roth 401(k), you contribute money that's already been taxed, but then all your growth and qualified withdrawals in retirement are completely tax-free.

The decision between Traditional and Roth often comes down what we discussed with an IRA: do you think you'll be in a higher tax bracket now, or in retirement? There's no wrong answer, it's about what makes the most sense for your financial picture. The great news is, Roth 401(k)s are becoming more common, and they even allow you to contribute more money per year than a Roth IRA.

Slide 5: The AMAZING Employer Match

Alright, if you take one thing away from this lesson, let it be this. This is where some employer plans become AMAZING. Many employers will do something called an employer match. What does that mean? It means that your employer may contribute money to your retirement account based on how much you contribute!

Let me give you a quick example: Imagine your employer matches 50% of your contribution up to 6% of your salary. If you make $40,000 a year and you decide to contribute 6% of your salary ($2,400), your employer will then add an extra $1,200 to your 401(k) for you! That is literally FREE MONEY for your retirement. Money that you didn't have to earn, that your employer is just giving you as a bonus for saving!

Slide 6: Do NOT Miss the Full Match

Contributing at least enough to get the full employer match should be a high priority (after, of course, building an emergency fund). Seriously, not taking advantage of this is like leaving cash on the table. It's a guaranteed, instant return on your money – often 50% or more on that portion of your contribution!  If your employer offers a retirement plan with matching, make getting that full match your goal when you start contributing.

Slide 7: Understanding Vesting

Now, there's one important concept related to that free employer money, and it's called vesting. Vesting is simply when you gain full ownership of your employer's contributions. The money you put into your 401(k) is always 100% yours immediately – it's your money. But employer contributions might have a waiting period.

For example, with "cliff vesting," you might have to work at the company for, say, three years before all of the employer's contributions become 100% yours. Or, with "graded vesting," a portion becomes yours over time – maybe 20% each year for five years. This is simply designed to encourage employees to stay with the company. It's important to understand your company's vesting schedule when you start a job.

Slide 8: Enrolling in Your Employer Plan

So, how do you actually get started with one of these powerful plans? It's usually quite simple! When you start a new job, your HR (human resource) department will typically guide you through the enrollment process. Or, if your company has an annual enrollment period, you can sign up then. You'll make a few key decisions:

• Your contribution percentage: Remember, aim for at least enough to get that full employer match

• Traditional or Roth 401(k): If both are offered, you'll choose which tax treatment you prefer. Note you may be able to do a blend of both.

• Investment choices: This is where you pick how your money grows. Don't worry, we'll talk more about making smart investment choices in a future lesson

Slide 9: How Much Should You Contribute

So, what's the magic number for how much to contribute?

• Minimum Goal: As we said, contribute at least enough to get the full employer match. That's priority number one!

• Overall Goal: A common and excellent recommendation for a comfortable retirement is to aim for contributing 10-15% of your salary, and this percentage includes any money your employer contributes.

• Strategy: A fantastic strategy is to increase your contribution percentage each year, even by just 1%, or whenever you get a raise. You won't even miss the money, and your future self will thank you immensely.

Slide 10: Wrap-up and Take Action

Remember this: Employer-sponsored plans, especially when they come with that employer match, are incredibly powerful tools for building retirement wealth. They make saving easy, they offer great tax advantages, and they can literally give you free money.  Don't leave FREE MONEY on the table!

If you are currently employed, or when you get your first job, make it a point to find out if your employer offers a retirement plan like a 401(k), and what their employer matching policy is. Knowledge is power, especially when it comes to your financial future!

Click on the link below to open the online quiz.  The quiz will open in a new tab.

Note: To receive your "Badge of Completion" you will need include the your name, email and score 100% on the quiz. You can take the quiz more than once.  Your highest score will be used.

Link to online quiz  (opens in new tab)