IRA Cons

Employer-sponsored benefits reflect the culture and business of the organization, and plans should be crafted and selected accordingly. Think about your current (or former) organization's benefit plan. Did it help to improve the quality of your work as well as your personal life? Why or why not? Was it a generous benefits program or were there specific benefits you felt should have been included?

In addition, even though this type of plan is available for all types of businesses, its use may result in the company facing annual mandatory contributions. Specifically, if this plan is in place for a business, they will have to contribute funds for every employee that works at least 1,000 hours in the year. Although this may be disadvantageous for many, there are instances where other plans will not fit the needs of the business. As a result, there are instances where a profitable business may opt for this type of

All IRA’s have the same basic characteristics that enable customers to save money while gaining benefits that may include tax-deferred savings and tax deductions. An IRA is a product in which customers place additional products

There are many advantages of 401 (k) plans, both for employees and their employers. One major important benefit is that the employee has control over how much money they contribute to their account. In addition all employer contributions and any growth in the capital grow tax-free until withdrawal. If the company matches contributions, it's like getting extra money on top of your salary. Also, unlike a pension, all the savings can be moved from one company's plan to the next (or to an individual retirement account) if a participant changes jobs (Neiters). Another benefit can be that employees can reduce their taxes because they are reducing their taxable income while they are working and because they will be in a lower tax bracket when they begin making distributions. "The major cause for the huge popularity of

No need of borrowing money that saves the risk of debt accumulation at his age

The Employee Retirement Income Security Act (ERISA) is a piece of legislation enacted y the US Congress in 1974, after decades of similar legislation had been proposed and some of which had been enacted, but primarily as a means of addressing gaps in contemporary law and policy regarding employment pensions and retirement accounts (US Department of Labor, 2012). This legislation spells out certain requirements regarding information that retirement plan administrators must provide the participants and beneficiaries so that they can make pertinent decisions or take steps to safeguard their retirement savings, and also places certain guidelines and limitations on the conduct of managers of pension and retirement plans (USDOL, 2012). Government reporting standards and measures to ensure the protection of and proper access to retirement funds are also part of the legislation (USDOL, 2012).

A) Defined benefit plans are attractive to employees because they protect them from interest rates pr changes in asset values. They also make sure that retirement income will have a similarity to income they earned while still working. Defined benefit plans also do a better job of protecting against inflation and provide other retirement related benefits. These plans can also present risks for sponsoring employers. These risks with the defined benefit plan our greater than the risks with the defined contribution plans. What are these risks? Also contributions made by employers might be actually smaller then they are to defined benefit plans.

An organization can offer several different types of retirement plans to their employees. There are two types of plans that are most often used such as the Defined Contribution Plan and the Hybrid Plans. The Define Contribution plans are beneficial not only to employees retirement needs but also beneficial to the company at the same time. Section 401(k) plans, Employee Stock Ownership Plans (ESOPs), Profit Sharing Plans, and Stock Bonus Plans. On the other broad of the spectrum we have the Hybrid Plan or the Cash Balance Plans, which may also be

a. i. An employer with a defined-contribution plan pays into the plan either an annual lump-sum per employee or calculates payments based on the employees‟ current wages and or time of service with the firm. Under such a plan, the employer does not guarantee the future amounts employees will receive when they retire. The employees covered by a defined-contribution plan assume the risk for the pension plan‟s financial performance. Under a defined-benefit plan, the employer specifies the size and timing of the payments that the employees will receive when they retire. Typically, these retirement benefits are commensurate with the wages earned by the employee in his or her last few years of employment

Traditional pension plans were once the gold standard of employer-sponsored retirement plans before IRAs and 401(k)s became more prevalent. If you have such a plan at work, your life expectancy and benefits were calculated to set your payroll and employer contributions. Once fully vested, the pensions are guaranteed to employees or their heirs. There are also special annuity plans called 412(i) or 412(e)3 plans that are funded through insurance. Features of these retirement plans include:

Social security was created in response to the persuasive poverty during the great depression. It began when the social security act was signed by the FDR on Aug 14, 1935 but taxes for it were not collected until January 1937. Although its goal was to provide retired citizens with funds to survive it was ultimately a long-term shortfall. The plan for social security as it stands today would only last until 2033. This is due to demographic pressures and a week economy as of late. Without any modifications, social security will certainly not be around for the future generations.

Individual Retirement Accounts (IRA) is money set aside form paychecks, usually in stocks and bonds (Ferrini). There are some differences when it comes to IRA and 401k. Which I did not know of before I wrote this paper. What should be cleared is you may have both you do not have to just have one. Anyone who has earned income and is below the age of 70 can contribute to a traditional IRA, while only people who are employed at a company that offers a 401K can contribute to a 401k (FOOL).

Roth IRA is a banking system where you can deposit your money into a retirement account and pay tax on transaction money to enjoy tax-free withdrawals. Roth IRAs promise well on the off chance that you anticipate that your assessment rate will be higher in the course of retirement than your present rate. That makes Roth IRAs perfect investment funds vehicles for youthful; bring down salary specialists who won't miss the forthright assessment conclusion and who will profit by many years of tax-exempt, aggravated development. Roth IRAs likewise request to any individual who needs to limit their duty chomp in retirement and additionally more established, wealthier citizens who need to leave advantages for their beneficiaries

Employers assume responsibility for providing retirement funds in a defined benefits plan. In the plan, a specified amount is set aside for future payments to employees, for life, during retirement. The amount is determine in advance is based on factors such as age, salary, and length of employment. In 2009, the maximum amount to be allotted under the plan was $195,000.

1. In a defined-contribution (DC) pension plan, the employee or employer, or both, make regular contributions to the plan. In the US, employees typically set aside a predetermined percentage of their earnings which is deposited to the plan and the employer will match that contribution. Ultimately, the amount of money available to the individual upon retirement is determined by the performance of their investments. Each employee retains the option to choose how to diversify their investments, while the employer will typically provide a “default allocation” option. The options available are generally very varied, and includes a number of index funds and actively managed mutual funds.