Week 12 Inclass AssignmentRetirement PlansInstructions – Complete the following for each type of plan by reading chapter 14 orhttps://www.thebalance.com/types-of-retirement-plans-2894324 or another online option. You probablylistened to the video which has a lot of the answers already. I want you to learn about these types of plans asthey will be significant in your LIFE. Definition – I hav
Week 12 Inclass Assignment
Instructions – Complete the following for each type of plan by reading chapter 14 or
https://www.thebalance.com/types-of-retirement-plans-2894324 or another online option. You probably
listened to the video which has a lot of the answers already. I want you to learn about these types of plans as
they will be significant in your LIFE.
Definition – I have done #1 for you. You will define the rest.
Types of investments – What investment choices do you have with each type of plan? Defined benefit
plans offer you no investments choices as it is formula driven. Basically the investment types are
mutual funds for company sponsored plans and self-directed investments (stocks, bonds, mutual funds,
ETFs, etc for IRAs).
Annual amount – How much can you contribute to this plan annually for 2018?
Tax implications – tax deferred, tax free, etc.
1. Defined Benefit – a government or company sponsored retirement plan where the monthly benefit at retirement
is calculated based on a formula (years of service*age factor*monthly salary).
Social Security – Our nation’s retirement plan. Your employer deducts an amount of your paycheck and
forward to the Social Security program. Based on your work record, you will be eligible for a monthly social
security amount. Go to ssa.gov and create an account to review your work record and estimated payment.
Pension – A retirement plan typically offered by state and local govt and education. These have mostly been
eliminated by corporations. Even today, our major pension plans in CA (CalSTRS and CalPERS) have required
employees to contribute more to his/her pension plan.
2. Defined Contribution – is a retirement plan where employers and employees both make their contributions on
3. Company Sponsored Plan
a) 401k w/match –
Type of investments – stocks, bonds, savings, mutual funds, ETFS, etc
Annual amount – 18500
Tax implications – tax deferred accounts
b) 401k, 403b, 457 –
Type of investments – stocks, bonds, savings, mutual funds, ETFs, etc