Retirement Plans
Taking the Mystery Out Of Retirement Plans
One of the labor-related problems experienced by small enterprises is the question of whether or not to offer a retirement plan. While small firms can benefit much from offering retirement plans, many tend not to institute them due to such factors as revenue uncertainty, high employee turnover and high administrative burdens and costs. However, affordable plans designed expressly for small firms do exist, and many are less of an administrative quagmire than owners might think. One such plan is the 401(k) plan, which offer many choices for investing the contributions and come with a variety of funding options.
It's Time to Get Serious About Company-Sponsored Retirement Plans
The basic types of company-sponsored retirement plans and their suitability in various situations are discussed. The SEP-IRA is ideal for small companies with variable income that employ both full-time and part-time workers. SIMPLE IRA-S AND SIMPLE 401(k)s are best suited for small businesses with reliable, healthy revenues, SIMPLE plans are relatively easier to administer as they require little in the way of documentation. The 401(k) retirement plan is a good match for businesses of any size that need some flexibility when it comes to decide how much the company will contribute to an employee's plan.
The Relevance of State-University Retirement Plans in Job Selection
Documents provided to newly hired faculty members were requested from the major state-supported university in each of fifty states. Those documents revealed two basic types of retirement plans: state-controlled, defined-benefit plans in which retirement benefits are a function of a formula rather than the contributions by the employee and employer, if any; and third-party, defined-contribution, input-based plans in which the funds are controlled by a third party and the benefits depend upon the amount of contributions and the return earned by them. The analysis focused upon the defined-benefit formula plans and a standard was developed to facilitate analysis. The simulations undertaken reveal significant, decision-relevant biases-especially against faculty members who elect to change employers as infrequently as once every ten years when different pension plans are involved.
Retirement Salvation
The features of an individual pension plan in which savings can be done to provide funds after retirement, are discussed. An individual pension plan allows a private company to set up a benefit-defined pension plan for its executive or even for a single shareholder. The company contributions are tax deductible, and if the company has to borrow to make its annual contribution, the interest is tax deductible. Individual pension plan’s must comply with Revenue Canada rules as the amount a company can contribute depends on the age, length of service, and to the past salary of the employee. In an IPP even if an employee have very little saved at age 50, he can achieve over $1 million.
Retirement Decision Matrix for Employees of Non-Profit Organizations
College personnel whose retirement is covered under contributory retirement systems have a large number of options to consider when planning for retirement. This paper features a computer model which calculates expected retirement income depending on age at retirement, contribution levels, annuity option chosen, and initial payout option chosen. The planning model can aid in deciding on an early retirement option, on increasing voluntary contributions to retirement funds, or in estate planning.
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