Roadmap to Retirement: When You Start a Job

Employers are not required to offer retirement plans to employees. If your employer has a retirement plan, it is important to know what kind of plan it is, and which employees are eligible to join the plan. Some plans include all employees. Others include only employees in certain kinds of jobs. Often plans have a waiting period before you can be covered by the plan. Many require that you sign up to join the plan. When you start a job you should find out whether your employer has a plan, what kind of plan it is, whether it covers your type of job, and when you can join it.

Types of plans

There are two basic types of private-sector retirement plans: defined benefit and defined contribution. Defined benefit plans are typically either traditional pension plans or “hybrids,” such as cash balance plans. Defined contribution plans are plans with individual accounts, such as 401(k)s, 403(b)s, profit sharing plans, SEPs (Simplified Employee Pension) and SIMPLEs (Savings Incentive Match Plan for Employees). Within each type of plan there are many variations.

The following publications have additional descriptions of plans by type.

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