Retirement Planning for 3M Employees: Making the Most of Your Pension and 401(k)
If you work at 3M, you’re familiar with the generous retirement benefits available to help you prepare for life after work. Between the 3M Pension Plan (for eligible employees) and the 3M Voluntary Investment Plan [a 401(k)], you have valuable tools to help create a comfortable retirement.
The key is understanding how your benefits work and how to use them together effectively. This blog offers strategies to help 3M professionals in the Inland Empire and beyond use their benefits for the retirement they desire.
1. Understand Your 3M Retirement Benefits
3M provides two main types of retirement programs:
Pension (for eligible employees): Many longtime 3M employees are covered under the company’s traditional pension plan, which provides a guaranteed stream of income in retirement. However, 3M announced that pension accruals for non-union employees will freeze after December 31, 2028. That means eligible employees will continue earning benefits until then, but no new benefits will accrue afterward.
401(k): This Voluntary Investment Plan (VIP) is available to most employees and can serve as a powerful way to build retirement savings. The 3M 401(k) offers:
Dollar-for-dollar company match up to 5% of your pay (each pay period)
An additional 3% non-elective company contribution, whether or not you contribute
Options for traditional (pre-tax), Roth, and after-tax contributions
The ability to perform in-plan Roth conversions (a valuable tax-planning tool)
These benefits can form a strong foundation for retirement if you know how to use them to your advantage.
2. Don’t Leave Free Money on the Table
One of the easiest ways to boost your savings is to contribute enough to receive the full company match. At 3M, that means deferring at least 5% of your pay into your 401(k). The company adds another 3% automatically, even if you don’t contribute anything.
That’s essentially an 8% total contribution before any growth, an opportunity worth capturing.
If you’re not sure whether you’re getting the full match, log in to your account and double-check your contribution percentage. Increasing your savings rate, even a little each year, can make a major difference by the time you retire.
3. Choose the Right Mix of Pre-Tax and Roth Contributions
Your 401(k) plan lets you choose between pre-tax and Roth contributions—or a combination of both.
Pre-tax contributions reduce your taxable income now, deferring taxes until you withdraw in retirement.
Roth contributions don’t give you a deduction today, but qualified withdrawals in retirement are tax-free.
Many 3M employees find it useful to split contributions between the two, creating flexibility for future tax planning. Some also take advantage of after-tax contributions and in-plan Roth conversions, sometimes called the “mega backdoor Roth,” to expand their pool of tax-free savings.
4. Coordinate Your Pension and 401(k) for Retirement Income
If you’re eligible for the 3M Pension Plan, think of it as the stable foundation of your retirement income. Your 401(k) then becomes the flexible piece you can adjust based on your spending, market performance, and tax situation.
Before retirement, it’s wise to explore questions like:
Should you take your pension as monthly payments or a lump sum, if offered?
When should you start Social Security to complement your pension income?
How will withdrawals from your 401(k) and IRAs impact your tax bracket each year?
Bringing these pieces together into a coordinated income plan helps you make the most of what you’ve earned.
5. Take Advantage of Tax-Efficient Strategies
Once you’ve built your savings, how you draw from those accounts matters. Strategic withdrawals, Roth conversions, and asset location (deciding which investments go in which accounts) can help reduce taxes over your lifetime, not just this year.
This is where working with a fee-only fiduciary advisor can make a difference. At Evermont Wealth, our Claremont-based firm often collaborates with clients’ CPAs to coordinate tax and retirement decisions. Our goal is to have every dollar work efficiently toward our clients’ goals.
6. Plan Ahead for Key Retirement Dates
A few important milestones to keep in mind:
Age 50: You can contribute an extra $7,500 annually (in 2025) to your 401(k).
Ages 60–63: A new “super catch-up” allows up to $11,250 extra (in 2025).
Age 73: Required minimum distributions (RMDs) generally begin (rising to 75 in 2033).
December 31, 2028: The pension plan freeze takes effect for non-union employees.
Building a retirement timeline around these key dates can help you manage taxes, cash flow, and investment risk more effectively.
Putting It All Together
Whether you’re 10 years from retirement or just starting to plan, making the most of your 3M benefits starts with understanding how each piece fits into your broader financial picture.
Your pension and 401(k) can complement each other beautifully—one offering guaranteed income, the other providing flexibility and growth. A thoughtful strategy can help you transition confidently from your 3M career into a fulfilling, financially sustainable retirement.
At Evermont Wealth, we help 3M employees across the Inland Empire and beyond—both in person and online—align their workplace benefits with their long-term goals. As a fee-only fiduciary, our focus is on creating lasting financial well-being.
We invite you to schedule a short, no-obligation conversation with one of our advisors. Schedule a free consultation today.
This material was written in collaboration with artificial intelligence (ChatGPT) derived from sources believed to be accurate. This information should not be construed as investment, tax, or legal advice.