401K Plan

 

401K plans continue to be the fastest retirement plan available to United States workers.  An Employee Benefits Survey conducted in 1995 by the United States Chamber of Commerce Research Center revealed that 78 percent of employers surveyed offered 401K- like plans in 1995.  This is up from the 70 percent of employers surveyed in 1987. One of the reasons 401K plans have become so popular is that they provided significant benefits for both employers and employees.  From the employer's perspective, 401K plans are less costly to fund than other types of retirement plans with similar benefits.  Dollars contributed to the 401K plan by the employees, in addition to the contributions made by the employer, are all deductible by the employer.  In addition to the tax benefits available to the employer, the employer will generally recognize non-tax benefits such as improved employee morale and increased employee retention rates. 

Employees also benefit significantly from participation in a 401K plan.  Any dollars the employees defer into the plan are pretax dollars so the employees receive immediate tax savings.  Further, the earnings which accumulate in the 401K plan provides a convenient and effective way for employees to save money for their retirement.

For more information please contact jlkfountain@aol.com

 

 

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