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More and more people are concerned about having enough
money for comfortable retirement. Often, younger people,
who have plenty of time to invest before retirement,
are just as interested in beginning a savings program
as older people.
And, people who are closer to retirement may have
to play catch-up if they are among the many people
who have had a low rate of savings in the past.
What is the best approach to maximize the returns
on dollars saved while still meeting an individual’s
concerns about risk? Tax-favored saving vehicles are
looked at as especially appropriate for retirement
savings. Current U.S. tax laws make only a few of these
options available.
The employer-sponsored 401(k) Plan is on means that
is attractive for both employer and employees.
These plans often provide cost-savings opportunities
for business owners over traditional pension plans.
And, they are advantageous for all levels of employees
from executives to hourly-paid.
Employees appreciate the benefit. They can see their
money grown in their personal account, and they know
their employer is making this tax-advantaged saving
vehicle possible for them.
Employer-sponsored 401(k) plans have been the fastest
growing employee benefit. Major corporations sometimes
offer 401(k) plans in conjunction with other employer-sponsored
retirement programs.
At many small and mid-sized companies, 401(k) is the
primary retirement plan. Smaller employers are attracted
to these plans in the face of the often-unaffordable
cost of funding and administering traditional pension
plans.
With traditional plans, employers likely will pay
a much larger share of the cost.
The 401(k) plan is viewed as a tax-advantaged way
for employees to save their own money. The employer
has the option of offering its own matching funds to
increase the benefit and incentive to employees.
04/04 - BACK
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