Retirement, Investments, & Insurance for Individuals Invest & Retire Retirement plans 401(k) & 403(b) retirement plans

401(k) & 403(b) retirement plans

Simplify the process for saving.

These common plans can streamline your retirement savings.

What does a 401(k) or 403(b) plan offer?

  • Automatic payroll deductions to help you make saving a habit
  • Reduced taxable income, through pre-tax contributions
  • Matched contributions, up to a certain percent (from some employers)
  • Long-term savings and growth potential across a variety of investment options

If your employer offers a 401 (k), 403(b), or a governmental 457(b) plan with services through Principal®, enroll online now.

Saving a little today may add up to a lot tomorrow.

If you’re already enrolled in a 401 (k), 403(b), or 457(b) plan with services through Principal, consider increasing the amount you contribute from each paycheck. Even a few extra dollars per paycheck may add up significantly over time—and it only takes a few minutes.

Log in to increase your contributions.

Tax benefits can help you save more.

Contributions to a 401 (k), 403(b), or 457(b) plan that come out of your paycheck on a pre-tax basis reduce your taxable income. Potentially, this could push you to a lower tax bracket, too.

In 2024, the yearly contribution limit increased to $23,000, but some plans may have a lower limit. Log in to check your plan’s details.

Looking for a retirement plan Loan?

When bills or debt feel overwhelming, it can be tempting to consider borrowing against your account in a 403(b), 401 (k), or 457(b) plan. But the trade-offs can be steep—and we want to make sure you understand them.

In the long run, you may pay more than the loan amount you withdraw, including:

  • any initial set-up and quarterly loan fees,
  • taxes you pay on the money you use to repay your loan, and
  • interest paid to yourself based on loan interest rates over time.

In addition, you may miss out on some potential growth and compounding of your earnings, which can be a major advantage of long-term savings in an account under 401 (k), 403(b), or 457(b) plans.

To give you an idea, $20,000 in a 401 (k), 403(b), or 457(b) account could triple in 20 years at an average 7% rate of return—but not if you withdraw it today.