Northwell Health 401(k) and 409(a) Review: Is It Good, Can it be Improved and Should You Keep It or Roll It Over at Retirement?

If you’re trying to make sense of Northwell Health’s retirement plan, here’s the short answer: it’s above average in our view —with strong employer contributions wrapped in a vesting schedule that requires a bit of patience.

The Vesting Schedule: The Hidden Fine Print

Northwell uses a six-year graded vesting schedule, far longer than most employers. Here’s what you actually own out of the potential 10.5% employer contribution:

Please Note - contributions out of your salary are of course immediately vested because it is your money, but the 10.5% employer contribution actually takes a very long time to become yours. Below is our adjustments of the employer contributions (assuming you make a 6% contribution to your 401(k) which shows how much of your salary you can keep from the 10.5% employer contribution depending on how long you stay. These are our calculations and while we believe they are correct - you should confirm these numbers with the HR or benefits people at Northwell Health before making any decisions based on this information.

• Year 1 – 0% of the 10.5% employer contribution vested = 0.0% of pay

• Year 2 – 20% of the 10.5% employer contribution vested: 2.1% of pay

• Year 3 – 40% of the 10.5% employer contribution vested: 4.2% of pay

• Year 4 – 60% of the 10.5% employer contribution vested: 6.3% of pay

• Year 5 – 80% of the 10.5% employer contribution vested: 8.4% of pay

• Year 6 – 100% of the 10.5% employer contribution vested: 10.5% of pay

  
  

The contributions are excellent. The waiting period to own them is not.

Strengths of the Northwell Health 401(k)

• Employer contributions up to 10.5% (which is well above average in large medical groups, in our experience)

• The 401(k) fund line up includes low-cost funds including low cost Vanguard funds

  
  

Weaknesses of the Northwell Health 401(k)

• Six-year vesting period for employer contributions is far longer than industry norms in medicine or amongst large businesses generally

• No self brokerage window, limiting investment flexibility for sophisticated investors (a self directed brokerage window like a Fidelity BrokerageLink Account, Charles Schwab Personal Choice Retirement Account or Vanguard Brokerage Option) are available at other large medicle employers (LifePoint Health, Kaiser Permanente etc) and it is a major weakness for a 401(k) with lots of highly compensated physicians to not have a self directed brokerage account to allow a truly customized investment approach

  
  
  
  

So, Is It a Good Plan?

Yes, because of the generous employer contribution, if you stay for 6 years and low cost index funds, we regard the Northwell Health plan to be above average.

Can the Northwell Health 401(k) Plan be Improved?

In our view, the Northwell Health 401(k) Plan can easily be improved to make it more physician friendly.

There are two things that can be done.

First, a more typical vesting schedule that would lead to 100% vesting over 3 years would improve this plan because it would bring it in line with industry averages.

Second, adding a self directed brokerage account with a major brokerage firm like Charles Schwab, Fidelity or Vanguard which could allow highly paid Northwell Health physicians and clinical staff better tailor their investment approaches to their actual goals.

The person to contact to request improvements on this plan is Michele Cusack, the SVP of Finance at Northwell Health. Here is her linkedin account: https://www.linkedin.com/in/michele-cusack-629378b

Generally speaking changing a vesting schedule is hard to do, but getting a self directed brokerage account added to a plan is easier especially if you point out that other large medical groups like The Permanente Medical Group (Kaiser), LifePoint Health have self directed brokerage accounts in their retirement plans.

A provider like Transamerica to our knowledge might even offer Self Directed Brokerage Accounts through Charles Schwab (the Personal Choice Retirement Account) so it is a feature that simply has to be turned on at many vendors since it is someting their standardly offer.

What about the 409(a) - is it any good?

The Northwell Health 409(a) plan is a deferred compensation plan where you can put away money in in excess of the normal 401(k) contribution limits.

What is good about the 409(a) plan at Northwell Health is that it has flexible distribution options, to our knowledge, as of the time of this writing on 11/25/25.

What is bad about any type of deferred compensation plan like this is that the money a) will be taxed later at your ordinary income rates which are typically higher than the capital gains rates b) unlike money that you might save in a taxable account, it can usually be seized by creditors of your employer if your employer goes bankrupt. This does happen - it has happened to several people who have used these plans including Chrysler executives and physicians at Steward Healthcare - so you should be aware of the risks of deferred compensation plans before utilizing them, in our view.

Of course, you need to always do your own research, talk to your own advisors and make your own financial decisions, since we are not your financial advisor unless you have a signed written agreement with our firm.

For Pre-Retirees: What Should You Do With Your Northwell Retirement Money When You Leave?

This is where my ideal reader (you) leans in.

Once you leave Northwell — whether to retire, relocate, or shift roles — you have two main choices:

1. Keep your money in Northwell’s 401(k) plan

This can make sense if:

• You want simplicity

• You’re happy with the limited menu of Vanguard index funds

• You have suff sufficient funds that even with vastly inferior investment options (in our view) compared to the entire investment universe that you could access in an IRA at a quality firm, you still feel confident that you can generate sufficient income from your needs.

  
  

  But many wealthy pre-retirees find this option restrictive.

  
  

2. Roll your assets over into an IRA (the option most pre-retirees prefer)

A rollover to an IRA typically gives you:

• Full investment freedom (including ETFs, income funds, and individual bonds allowing for a highly customized and perhaps more sustainable investment approach for your goals)

• Better control over tax strategy, including Roth conversions, RMD planning, and withdrawal sequencing

• More customization for income planning as retirement approaches

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For someone 55–65 with $2M+ saved, flexibility is not a luxury — it’s the cornerstone of building dependable lifetime income.

This is where professional guidance pays off in real dollars.

Where D.R. Harris & Co. Helps

At D.R. Harris & Co., we help affluent pre-retirees turn employer plans, IRAs, and taxable accounts into a coordinated strategy that produces reliable, predictable income.

We focus on:

• Investment design for income

• Roth conversions where appropriate

• Withdrawal approaches that consider both investment volatility and taxes

• Functional methods to convert assets into reliable income to replace a paycheck.

If you’re nearing retirement and want confidence — not guesswork — this is the time to get clarity.

If you are interested in having a 10 minute introductory call to get to know each other, feel free to fill out the following form to request a phone call.

Disclaimer: This article is written for educational purposes only. While we believe the information is correct as of the time of its writing on 11/25/25, you should always independent verify any information we discuss in this article before making any financial decisions. Your employer, Northwell Health and their benefits people are generally going to be the best people to talk to in order to ensure you have accurate information about your employee retirement benefits and plan terms. Neither Daniel Harris nor D.R. Harris & Co. is your financial advisor unless you have a signed written advisory agreement with our firm. You should do all of your own research or consult with your own professional advisors before acting on any information you read about on this article.