retirement plan 4

Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students.

Respond to the following in a minimum of 175 words:

Employees have a variety of retirement options. Having the ability to articulate retirement options to employees is important.

Discuss the factors to consider when selecting a retirement plan. How would you evaluate the various types of retirement plans for some of the factors you identified?

Reply to at least two of your classmates. Be constructive and professional in your responses.

Reply 1

Although there are seven (7) different types of retirement plans available, not all work for all companies. For example, traditional IRA or Roth IRA, are mainly for personal retirement plans and usually are offered by banks. And there are some plans that are meant for sole-proprietors. Then you need to determine are you a for profit or non-profit organization, what is your employee population and can you afford to offer a match. Salaries are also important to consider, since non-discrimination can make your plan non-compliant. If you are non-profit you have the option of offering either a 401(k) or a 403(b). A 403(b) plan has some advantages over the traditional 401(k) plans, in that it’s less administrative for a company. However, the disadvantage is the investment options, has there are limited options. Even though a 403(b) basically functions the same as a 401(k), employees are more drawn to 401(k)’s because it’s more common and have more faith in them then other plans. So when selecting a plan, considering what employees are more comfortable with or already know, is a key selling point.

Reply 2

Retirement accounts should be a core part of any retirement savings plan. The most common of these include 401(k)s and individual retirement accounts (IRAs). The wisdom of maximizing tax advantages is clear but figuring out which type of account will provide the most benefit isn’t as obvious. With a traditional IRA, you can claim a tax deduction for the year in which you make a contribution. A traditional IRA is fully deductible. However, once you start withdrawing money in retirement, those distributions are subject to income taxes. With a Roth IRA, your contribution isn’t tax deductible, but qualified Roth distributions are free of taxes and penalties. You can’t take distributions from a Roth in the first five years after opening the IRA, and one of the following must also hold true, you have reached the age of 59½, you are disabled, You are using the distribution to buy a first home and You have died, your beneficiary receives the distributions. A 401(k) is a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account. Employers typically match a certain percentage that you contribute.

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