How Carilion Clinic Employees Can Make The Most of Their Retirement Benefits

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Partners in Financial Planning Blog - How Carilion Clinic Employees Can Make The Most of Their Retirement Benefits

If you’re an employee of Carilion Clinic, you likely have a generous compensation package. But with a complex and varied set of benefits, did you pay close attention to Carilion Clinic’s retirement offerings?

Preparing for retirement starts by making the most of every benefit available. But since employees may need to “opt-in” to these benefits, you may have overlooked some during the hiring and onboarding process.

Below we discuss the need for a solid retirement plan as a medical professional and what Carilion Clinic provides its employees regarding retirement planning and saving.

Why Doctors Need A Healthy Retirement Plan

Physicians and medical specialists are put in a challenging position when preparing for retirement. Thanks to additional years of schooling and high rates of student loan debt, doctors are often forced to wait longer to start saving for retirement than their peers. 

Unfortunately, time is a crucial component of building a solid retirement strategy. So if you’re unable to start saving until you’re in your 30s, you must create a diligent plan to make up for lost time.

The good news is that you are in a high-earning field and have options that can help make preparing for retirement possible. An excellent place to start is by looking at what your employer provides.

Today, we’ll hone in on the specific retirement benefits at Carilion Clinic.

How To Save for Retirement At Carillion

The benefit of working for an extensive hospital network like Carilion is that you have options for retirement preparation. Currently, Carilion has several retirement savings plans, including:

  • 403(b) or 401(k)
  • Pension plan
  • Nonqualified 457

Below, we’ll take a closer look at each option, as different employees will be eligible for different employer-sponsored plans.

Qualified Retirement Plan

Whether you are employed by the for-profit or non-profit arm of Carilion Clinic will determine which qualified retirement plan you are eligible to participate in.

Non-profit employees can access a 403(b), while for-profit employees have a 401(k). 


Carilion offers a traditional 401(k), which means you fund the account with pre-tax dollars. You elect a set percentage of your paycheck you’d like to defer before taxes. That deferral is automatically transferred into your account pre-tax, meaning you can steadily grow your retirement savings without having to do a thing. 

While 401(k) contributions lower your taxable income in the year you make them, you will have to pay back the IRS on your withdrawals in retirement.

Carilion does not currently have 401(k) matching or a Roth 401(k) option. As a reminder, a Roth 401(k) would employ after-tax dollars, meaning qualified withdrawals in retirement would be tax-free.


A 403(b) works similarly to a 401(k). Your employer automatically contributes pre-tax dollars to the account, lowering your annual taxable income. But the IRS taxes distributions in retirement as ordinary income.

What’s the difference between the two?

403(b)s are often more limited in their investment selections when compared to 401(k)s. Typically, 403(b) investments comprise mutual funds and annuities, making them riskier investments.

But if you’re a Carilion employee, you’re in luck! They retain the same investment options for their 401(k) and 403(b) plans. 

Fund Line-Up

Carilion’s fund line-up for its retirement investment accounts includes Vanguard funds, which we believe are often a solid option for medical professionals. Specifically, they offer Vanguard Target Date Funds, which allow employees to select a fund based on their estimated retirement year.

Carilion Pension Plan

It’s rare to find an employer that offers a pension plan, but Carilion does, making them a desirable employer for medical professionals in Virginia.

A pension plan is designed to incentivize and reward employees who choose to stay with the employer for a long period. Your pension plan vests after five years of employment with the network for eligible Carilion employees, and it is backed by the Pension Benefit Guaranty Corporation (PBGC).

How Does a Pension Plan Work?

Since pension plans are a less common compensation benefit to come across, we wanted to share a brief overview of how they work. Understanding the immense benefit a pension plan can have on your greater financial picture should help you better weigh your options in terms of onboarding with or leaving Carilion.

A pension is a defined benefit plan where your employer contributes to the account regularly, and you receive a guaranteed retirement income. This account is unique because you don’t have to contribute your paycheck; the company contributes on your behalf and assumes the financial responsibility and risk.

During your time of employment, Carilion will make regular contributions to your pension plan. When you retire, you’ll receive a check every month with a portion of your pension. How much you receive will be based on a formula that accounts for your age, years of service at Carilion, and compensation.

Carilion Nonqualified 457

A 457 plan allows employees to contribute from their salary into a tax-advantaged retirement account. This plan is typically only offered to highly compensated employees.

What Does Nonqualified Mean?

A nonqualified plan means that the plan does not meet the Employee Retirement Income Security Act (ERISA) guidelines. 

Why is this important for employees to know? 

Because if Carilion went bankrupt, for example, the funds you contribute to a 457 account could be lost and inaccessible.

457 vs. 401(k)

A 401(k) is a qualified plan, meaning it does follow the guidelines for retirement plans established by ERISA. While this provides a bit more protection over assets for employees who contribute, it also means the plan is subject to strict rules.

Likely, the most impactful difference between these two plans for Carilion employees is the penalties for early withdrawals. If you cashed out your 401(k) before turning 55, the withdrawal might be subject to a 10% tax penalty on top of any income tax. 

On the other hand, there is no penalty for cashing out a 457 plan before retirement. However, any withdrawals you make are still subject to ordinary income tax.

Understanding Your Retirement Benefits

If you breezed over your retirement benefits when joining Carilion, it’s never too late to revisit your options. Starting now is better than starting later, as the more time you allow your money to accumulate, the more prepared you’ll be for a healthy and happy retirement.

If you’re still considering employment with the Carilion Clinic, we hope you found this guide helpful for weighing an essential part of your compensation package.

Medical professionals, especially those who work within a hospital network like Carilion, have the potential to be high-earners within their field. With that comes a need to ensure your future retirement maintains the standard of living you’ll become accustomed to during your working years. Taking advantage of your employer-sponsored retirement offerings is the perfect place to start.

Creating Your Retirement Plan Together

At Partners in Financial Planning, we’re devoted to helping doctors, physicians, and other medical professionals build and sustain healthy financial well-being. To us, that includes establishing a solid savings strategy for retirement.

We enjoy getting to know you professionally and personally, from your goals and values to your vision for the future. By doing this, we can help create a customized plan that matches your needs now, tomorrow, and in retirement.

If you’re a current Carilion employee or considering switching networks, don’t hesitate to reach out to our team today. We can also help you review these retirement savings options and other important parts of your compensation package.

About Us

Partners in Financial Planning provides tax-focused, comprehensive, fee-only financial planning and investment management services. With locations in Salem, Virginia and Charleston, South Carolina, our team is well-equipped to serve clients both locally and nationally with over 100 years of combined experience and knowledge in financial services.

To learn more, visit

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