401 k plans and legal implications

401(k) plan is very significant particularly when it comes to talented employees since they can be able to carry out different activities which include saving money (Lapin, 2010). This consequently allows them to be able to reduce the costs that they are likely to encounter since the employers are entitled to deduction of taxes when they contribute money to the employees’ accounts (Burns, 2011). This consequently saves the employees a great amount of money which they could have otherwise paid as tax. Furthermore, the money which is contributed may also grow mainly through investments in the following areas, bonds, money market, stocks, mutual funds, saving accounts and other areas of investments. This plan therefore allows the participants to take their benefits after leaving the company thus reducing the responsibilities of the administrates (Smith, 2013). On the other hand, the employment laws and this plan are kind of the same since they provide the employees with advantages which makes it easy for them to be able to safeguard their money. Furthermore, the plan works hand in hand with the employment laws in making sure that the employees are able to secure their money.  The benefits of the employees are also safeguarded thus allowing the employees to live free from any pressures and problems.

The employment law and this plan are very significant in making sure that the employees get to enjoy their fruits of their labour. Furthermore, both plans are responsible for making sure that the employees are at an advantage of reducing their expenses (Lapin, 2010). This plan covers the future of an employee since it allows one to be able to save money thus making it easy for him or her to be able safeguard his or her future. According to the laws of employment, an employee is entitled to a pension soon after his or her retirement (Smith, 2013). This consequently means that the employee is supposed to save money which he or she will receive immediately after the retirement. The 401(k) plan is the same as a savings plan which makes it easy for one to be able to save money thus being able to withdraw it after his or retirement. This savings safeguards one’s future and it can also be used to pay for the school fees debts and other grants that one might have received before getting employed. The future of an employee is therefore covered by this plan and this consequently makes one to be able to avoid any problems that he or she might have faced if the necessary plans could not have been put in place (Burns, 2011).

The money is usually deducted from an employee’s pay check before the taxes are deducted. This acts as a tax relief since the employee will not be taxed on the amount of money that has been deducted (Lapin, 2010). In addition, the 401(k) plan can be used by employees working in a private organization and those working in public organizations too. Anyone who is eligible can therefore be able to enrol in this plan thus being beneficial to him or her in future. The employment laws require an employer to sponsor an employee when it comes to the retirement. The 401(k0 plan therefore acts as the pension plan and it makes it easier for the employee to be able to earn money after retirement. The pension earned is therefore more since the tax deductions are reduced thus making the employee to earn money with reduced costs of taxation. Both the employer and the employee are able to benefit from this plan since the costs of taxation are reduced hence making both of them to reduce the costs paying for the taxes (Burns, 2011).

The employment law dictates the hours that one is supposed to work in a day and it also stipulates the amount of money that one is supposed to earn after an hour. The 401(k) plan also stipulates the amount of money that an employer is supposed to pay (Lapin, 2010). Furthermore, it protects the deducted from the employee’s pay cheque thus allowing the employee to live at ease without the stress of losing his or her pension when he or she finally retires. The employees are therefore covered by the plan and this makes it easy for them since the employers cannot avoid sponsoring the employees (Burns, 2011). The plan also safeguards the employees’ pension since it makes sure that the employers sponsor the employees’ pension. The employees’ pension money is also protected against extra taxation (Smith, 2013). This therefore allows the employees to be able to receive their money after their retirement without any problems of embezzlement of funds by the company or otherwise through poor taxation. The employees are protected by both the employment law and the 401(k) simply because they cover each and everything that the employees are supposed to be provided with. This two plans are therefore significant and they also work together in making sure that the employees do not suffer from either being mishandled or otherwise being mistreat.

The employment law makes sure the employees are subjected to the right working conditions. This law therefore allows the employees to be able to work under very good working conditions. Furthermore, they are also able to work according to the stipulated time of work thus they are being overworked (Burns, 2011). The 401(k) plan therefore comes in to make sure that the employees’ pension is not at stake thus the employees can be at ease because they will be able to receive their pension soon after their retirement thanks to this plan (Lapin, 2010).

This plan is very essential in a person’s life since it can be able to cater for an employee’s needs soon after his or her retirement (Lapin, 2010). This is because, the plan is able to provide a person with 60% of his or her previous salaries thus being able to carry out different activities. If an employee saves money in the plan for more than thirty years, then the plan can be able to provide him or her with salaries for the next thirty years soon after the retirement. This is very essential since one can be able to cater for his or her needs which includes paying for the bills immediately after the retirement (Smith, 2013). This plan consequently reduces the dependency ratio thus making it easy for the retiree to be able to cater for his or her needs. This consequently increases the economic growth since most people are earning and they will still be paying the taxes when it comes to withdrawing the money. This will consequently allow the employees to be able to live peacefully without any problems which might involve money or otherwise lacing money (Burns, 2011).

The 401(k) plan and the legal implications are therefore responsible for protecting the employees against any forms of harassments. This therefore makes it easy for the employees to be able to carry on with their activities knowing that their future is guaranteed. This therefore means that the employees can be able to invest and pay for their bills peacefully knowing that they will not have to suffer in future (Burns, 2011). Protecting the future of an employee makes it easy for him or her to be able to deliver the best services to the company since they are sure that their future is guaranteed. Thus the services provided to the company are good because the employer is also sponsoring the employees’ future. The money in the retirement plan grows and this makes it for a person to be able to carry out different activities such as buying a car immediately after the retirement. As the money grows, it makes it easy for a person to be able to plan how he or she will be able to use the money thus safeguarding his or her future. The money can also be used to carry out different activities such as buying a house or a piece of land or otherwise starting a business that will see a person being able to live peacefully even after the retiring (Lapin, 2010).

When an employee retires, the plan provides advice to the retirees on how they will be able to use their money. This consequently allows one to be able to understand how he or she will be able to spend their money thus avoiding spending carelessly (Lapin, 2010). Furthermore, the retirees can also be able to get new ways of investing their pension money on other activities such as on real estate business thus making it easy for them to be able to get their value of their money (Smith, 2013). This plan is essential to many employees since they control the amount of money that is supposed to be deducted from their paycheck. This is good since the employees will be able to pay for the retirement plan since it is deducted from their salaries (Burns, 2011). This makes it easy for a person to be able to pay for the plan other than if a person was paying for the plan according to the way he or she wants. This could not have been possible since most people usually find themselves not able to pay for the plan because they might use the money on other activities.

 

             On the other hand, since the employees’ money is deducted before the taxation this allows the employee to be able to save the costs of taxation (Burns, 2011). This makes it easy for the employees to be able to save the costs of paying the taxes and hence they will be able to use that money in future after getting their pension. Furthermore, the since the employee is sponsored by the employer, it makes it easy for the employee to save and use most of his salary on other activities. The life of the employee therefore runs smoothly since he or she can be able to use his or her money knowing that the future is catered for and there is nothing to worry about (Lapin, 2010).

The retirement plan acts as a security for your income since a person can be able to receive the money of any problem that may come his or her way (Burns, 2011). There are very many problems that an employee is likely to face and this may include getting an accident. If an employee gets an accident and he or she is incapacitated, it therefore means that he or she will have to retire because of not being able to work. The savings that he had earlier on spent on will be able to cater for his or her needs. This will it easy for such a person to be able to cater for his or her family even without the job simply  because he had earlier on saved his money and he will therefore be getting his or dues (Smith, 2013). This retirement is therefore important since a person can be able to live peacefully and in case of an accident then his or her future can be catered for. Most people particularly those who either lost their jobs due to accidents but did not have a saving plan may not be able to live peacefully since after their retirement they will not be able to pay the taxes (Lapin, 2010). This will only act as a disadvantage such a person will not be able to conduct different activities because of the lack of money since they might have not saved for the future. Since a person can be able to get the retirement benefits for more than 30 years, then it might act as a good investment because this will allow the person to be able to carry out different activities even after the retirement.  If a person retires at the age of 60 years, then he or she can be able to earn the pension money until he or she becomes 90 years old.

The 401(k) plan offers an income calculator which will be able to show a person how he or she can be able to conduct different activities (Lapin, 2010). This makes it easy for a person to be able to know the amount of money that he or she will be able to get when he saves a specific amount of money. This consequently motivates people into saving money since they can be able to receive the money immediately after their retirement. The more a person saves using the 401(k) plan, the more he or she is able to receive the pension. This therefore means that the employees who saved for many years his or her pension will be directly proportional to the number of years that he or she has also saved. This therefore means that the person will also be able to invest according to the way that he or she had earlier on invested on the pension plan. Therefore, in real life situation, the pension plan and the employment laws are very important since they are able to safeguard the future of a person. Therefore a person can be able to live peacefully without any problems hence his or her future will be bright (Burns, 2011).

Reference

Lapin, D. (2010). Thou shall prosper: Ten commandments for making money. Hoboken, N.J: John Wiley & Sons.

Burns, R. (2011). The naked trader: How anyone can make money trading shares. Petersfield, Hampshire: Harriman House Ltd.

Smith, M. X. (2013). Managing your firm's 401(k) plan: A complete roadmap to managing today's retirement plans. Hoboken, N.J: Wiley.