Implementing A Traditional 401 ( K ) Plan

“Only 24% of Baby Boomers are confident they will have enough savings to last throughout retirement, down from 36% in 2012.” (Frankel) This is the reason more Baby Boomers are working longer before retiring. At the same time the Millennials were growing up through the recession, acquired student loan debt and were entering a very competitive job market. Robin Lewis captured this reality through this quote. “This is a generation that is bigger than the boomers in population, but their wallets are smaller, and they are more into the style of life than the stuff of life.” This backs up a study conducted by Bank of America Merrill Lynch that shows “A whopping 82% of millennials are investing in a retirement savings account and 75% of the baby boom generation does so.” (Abrams) The main reason for this pattern is the Millennials are investing in retirement accounts at work many of which have matching programs and Baby Boomers are skitish of the market and losing more of thier retirement.

The term 401 (k) is one that is heard quite often in today's. Most people know that it has something to do with retirement, but few young people know exactly how 401 (k) plans work or why they are becoming more and more popular. Additionally, many people who have 401 (k) plans may not know all the details of how they work, how to get the most out of their plan, and how to keep their money safe. In reality, everyone in the business world should be aware of the details and advantages of having and managing a 401 (k) type savings plan, as it is becoming one of the most popular ways to save for retirement in the United States and many other countries.

State 529 saving plan is provided by the state, in which parents can start saving for their kids. For 529 savings plan to work, parents have to start early by planning ahead. As per author Nellies, Hung, and clark parents have to save only two-thirds of the funds needed for the future tuition fee of there kids. The gap between the funds in the saving plans and tuition is usually filled by scholarships, grants, and the interest made over the savings. Parents have to be careful while estimating

When the economy crashed in 2007 the youth was hit the hardest. The unemployment rate for people aged 25-32 was over 8 percent in 2013 (Machado “How Millennials…”). Instead of working dead-end seasonal jobs, Millennials would rather use this opportunity to do something they may have never had the opportunity to do otherwise. Also, growing up seeing their parents 401k’s wiped clean and hearing talk of failing social security program has caused Millennials to distrust their retirement options. In fact, only 6 percent of Millennials believe they will obtain the same benefits as their parents, and half believe that there will be no more money in social security by the time they graduate (Machado “How Millennials…”).

Today’s workforce is not all the same and the older generation was more concerned with pay and benefits rather than flexible work hours or work/life balance programs. The company offers 20 different investment plans for 401k. The company also offers profit sharing, life insurance and accident insurance. By having the option to choose which benefits an employee wants to enroll in it helps the employee take control of their own benefits instead of the company offering a set plan that may or may not fit the needs of what an employee is looking for from their employer. By giving employees a choice it helps keep costs down instead of automatically enrolling employees in programs the employee feels they do not need at the present time.

Roth 401(k)s are popular with younger employees, which makes it an important benefit offering. As you review your employee benefits as part of your recruitment and retention efforts, consider the competitive advantage of offering a Roth option to your 401(k)

In the United States, a 401(k) plan is the tax-qualified, defined contribution pension account defined in subsection 401(k) of the Internal Revenue Code. Under this plan, retirement savings contributions are provided and sometimes proportionately matched by an employer. However, in 1980 a benefits consultant named Ted Benna took note of the previously obscure provision. Mr. Benna figured out that it could be used to create a simple tax-advantaged way to save for retirement. At this

A Safe Harbor Retirement Plan is a 401(k) or 403(b) plan where the company makes a specific contribution to every plan participant. Contribution options are either a flat 3% of total yearly pay to all employees who are eligible,

In the New York Times article " it's a 401(k) world", Thomas L Friedman states how technology has advanced to the point where anyone can track anyone else's form of activity. Friedman States the good and the bad of this new era of technology. He tells us how certain people will make a living in this type of world. Living in this world with new technology, it could either make you or break you. Friedman's many facts makes me agree with what he has to say.

I also wanted to introduce myself and my team – Level Four Wealth Management. We focus on transforming the 401(k) experience to support and empower your company’s hiring, retention and productivity goals.

Employer matched 401k plan should not be the only retirement options people have its one of a few. Company pensions are almost a thing of the past many companies are doing away with this benefit due to cost associated with maintaining this plan. Today most people don’t even stay at a job longer than five years, with this type of turnaround it would make it that much more costly to an organization to maintain this benefit. The key to addressing the retirement needs of your employees it to educate them. By providing educational retirement workshops the employee will be better equip in making informed decisions about retirement. We all know it’s never early to plan for retirement the earlier the better. Young people as young as twenty should have a retirement plan already under way, when you are educated and informed you put yourself in a better position in the long run. As the HR professional in charge of informing the employees I would have a meeting broken into groups by departments. At the meeting I will explain our company’s retirement options company wide. Literature should be distributed explaining the plan how it works and what to expect when that time comes. Keeping the lines of communication open with the employees is essential; the employee should understand fully all aspects of the employer sponsored retirement plans.

I will start with your first observation regarding the articles in AARP. The article you have mentioned seem to compare older workers with younger ones, so I am wandering do some employers believe this will benefit older employees, given AARP is an organization for those 50 plus. Older more savvy employees could benefit from these potential weaknesses and work to gain an edge because younger workers are more energetic and less expensive to employ.

When people are asked how people will plan or rethink for retirement, the first thing that people will think about, is saving. There are some positive ways to save money, the author suggests to the readers to sign up for 401(k) plan. It is a plan help employees save for retirement, 401(k) should allow anyone to build up a nice nest egg. For example, “In Dave Ramsey’s The Total Money Makeover, for instance, he gives us “Joe and Suzy Average” who invest $7,500 per year ($625 per month) using their tax-free retirement account. They do this from age 30 to 70, getting 12 percent interest per year. At the end, they have $7,588,545 to their names.” When people invest in 401(k) plan, it is safer and more money in retirement and it also has a benefit that you don’t need to pay for tax when you take the money out. Beside 401(k), people prefer to invest money in the stock market for retirement-plan. According to author “ During a recent 40- year period,

It’s good to have both plans, the defined contribution plans, and the defined benefit plans because, with the 401k, you would get a fat check in which you would be able to pay off mortgage, loans, car notes, etc. and besides that, you also get your social security including health care provision (Martocchio, 2013).

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.