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Essay / Research Paper Abstract
This 3 page paper examines positive and negative aspects of the 401K including the rules of early withdrawal. Penalties are discussed. Bibliography lists 3 sources.
Page Count:
3 pages (~225 words per page)
File: RG13_SA104401.rtf
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Unformatted sample text from the term paper:
lore is that the 401K is a superior financial instrument and is worth embracing. In general, the 401K is a smart idea for employers and employees alike. Employers who offer
401Ks as part of a benefits package will attract employees, particularly if they contribute matching funds. Most of the time, the company matched dollars are tax deductible for the employer
("401k Employer Advantages," 2010). These plans are quite beneficial to employees, which is why they are highly recommended. First, there is a tax advantage as the funds are funneled
into the plan and when the employee reports his income, it does not include the funds. Another reason to use this financial vehicle is because many employers provide matching funds,
at least up to a point. Hence, if for every five thousand dollars one contributes, the employer matches it, that is like getting an extra five thousand tax free dollars
to invest. The 401K is a retirement plan and this is something that people need. Social security no longer is something for which most can rely. Yes, social security will
provide funds, but there has been enough talk about the failing system to worry people. Further, Social Security will not likely provide enough funds for someone to live comfortably in
retirement. Another point is that people are living longer and longer today, and earlier planners did not consider that concept. One financial planner writes: "I do all of my retirement
plans to age 100. Most of my clients are surprised by this, but I point out that there are 50,000 people in this country that have reached this age and
the number is expected to increase dramatically" ("Savings choices in your 20s can pave your future," 2010, 8). There are negative aspects of the 401K. Of course, it does cost
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