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"Employer-Qualified Plans: Retirement Planning 3 - Lesson 28"


This lesson is based off Chapter 28 of the text for Finance 418. Professor Bryan Sudweeks of Brigham Young University teaches this lesson. All lesson materials are available online at: Objectives: A. Explain Employer-Qualified Retirement Plans B. Explain Defined-Benefit Plans C. Explain Defined-Contribution Plans...(read more)



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retirement planning is an essential aspect of financial management. It is a process of setting financial goals and creating a plan to achieve them during the retirement years. One of the ways to prepare for retirement is through employer-qualified plans. Employer-qualified plans are retirement plans that are set up by employers for the benefit of their employees. These plans are designed to provide employees with a source of income during their retirement years. There are several types of employer-qualified plans, including 401(k), 403(b), and 457(b) plans. 401(k) plans are the most popular type of employer-qualified plan. These plans allow employees to set aside a portion of their salary into a retirement account on a pre-tax basis. Employers may also offer a matching contribution up to a certain amount, which helps employees save more for retirement. The investment earnings on the contributions made to a 401(k) plan are tax-deferred until they are withdrawn during retirement. 403(b) plans are similar to 401(k) plans but are designed for employees of nonprofit organizations, educational institutions, and certain other tax-exempt organizations. Contributions made to a 403(b) plan are also tax-deferred. 457(b) plans are designed for employees of state and local governments and certain tax-exempt organizations. These plans also allow employees to defer taxes on their contributions until they withdraw the funds during retirement. All three types of employer-qualified plans have contribution limits to prevent high-income earners from taking advantage of these plans. Employees can contribute up to $19,500 in 2021 to a 401(k) or 403(b) plan, while the limit for 457(b) plans is $19,500 for employees aged 50 and below. For employees aged 50 or older, the limit increases to $26,000 for 401(k), 403(b), and 457(b) plans. Employer-qualified plans offer numerous benefits for employees, such as tax-deferred growth, employer contributions, and automatic payroll deductions. They are also portable, which means employees can roll over their plans to a new employer's plan or an individual retirement account when they change jobs. In summary, employer-qualified plans are essential tools for retirement planning. They enable employees to save for retirement through automatic payroll deductions and offer tax-deferred growth and employer contributions. Employees should take advantage of these plans and contribute the maximum amount allowed to ensure a comfortable retirement. https://inflationprotection.org/employer-qualified-plans-retirement-planning-3-lesson-28/?feed_id=82622&_unique_id=6424a42dc449a #Inflation #Retirement #GoldIRA #Wealth #Investing #employerqualifiedplans #personalfinance #retirementplanning #QualifiedRetirementPlan #employerqualifiedplans #personalfinance #retirementplanning

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