Why Implementing a 401k Plan in the Office Can Boost Morale

There are myriad reasons why businesses of any size should consider implementing a 401k plan. Not only does it benefit the employees, but it can also benefit the business owner in terms of reduced payroll taxes and perhaps even tax credits. However, the biggest benefit that business 401k provides is an increase in office morale, which can improve your overall productivity and increase your bottom line.

How 401k Works

First and foremost, no matter if you are a partnership, a corporation, self-employed, or even a sole proprietorship, you can establish a business 401k plan. This is a federally insured retirement savings program that allows contributions from an employer, employees, or both. What’s more, as an employer, you can set up your own vesting schedule, which basically determines how much of your employees’ contributions you will match, and up to how much. Although a business owner is not necessarily required to contribute to 401k plans, sometimes an obligation may arise, particularly after non-discrimination testing shows a plan is “top heavy”.

How it Benefits Employees

When you provide 401k to your employees, every single contribution they make is withheld before any taxes are applied, and they are 100% vested immediately in their own contributions. Although there are penalties for employees who choose to withdraw funds from their business 401k accounts prior to retirement or before age 55, those who choose to retire during the calendar year in which they turn 55 (or older) are not subject to these penalties. Furthermore, some exceptions can be made for loans and hardship withdrawals based on 401k contributions.

Why You Should Contribute

Despite the fact that you are not legally required to contribute to a 401k plan as an employer, you should. For every single employee that contributes to 401k plans, their taxable income is reduced slightly. This means that your overall payroll taxes will likely come down, thus offsetting any contributions you make. For instance, you might opt to match the first 3% of the employees’ contributions 100%, and the next 1% to 3% as much as 50%. You can set this vesting schedule any way you would like.

How it Boosts Morale

In today’s day and age, many employees feel like slaves for companies that have very little appreciation for them. Even those who have a great education and work hard can sometimes barely eke out a living due to personal circumstance. When you take the time to implement a 401k program into your business, you are essentially showing your employees that you care about their long-term financial status and that you want to help them succeed. In short, to your employees, it is like they are getting a raise – even if they will not see those funds for another 20, 30, or even 40 years.

A business 401k plan is a must have for any business of any size. Not only is it an in-demand benefit that talented employees expect to see, but it helps those same employees feel appreciated. An appreciated employee is a productive employee, and that is just better for business.

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How to Stay Busy after Retirement

For many people, retirement can be both a blessing and a curse. It offers up the chance to close out the “hard” part of life, during which individuals worked hard to pay bills and take care of their families. However, along with this can come a sense of boredom, since having so much time and so little to do can take a toll. Here are some productive ways to stay busy after retirement.

#1 – Volunteer for a Good Cause

Most people have some sort of cause they are incredibly passionate about, whether it involves keeping their communities clean, feeding the hungry, or ending homelessness in their communities. After your retirement, consider getting involved with an existing group – or even create one of your own. Now that you have some time on your hands, you can use some of it to truly make a difference in the lives of others. Not only does it keep you busy, but it provides you with a sense of self-satisfaction.

#2 – Learn a New Hobby

Hobbies are an important part of retirement because they keep you focused and give you a way to utilize your spare time. Consider learning how to do something new, whether it involves playing golf or even cooking French cuisine. Most communities offer low-cost workshops and classes that will teach you anything from ballroom dancing to basic computer skills, so make the most of them and keep your brain active in order to truly enjoy every moment of every single day.

#3 – Join the Gym

Retirement can often lead to a sedentary lifestyle, particularly if your job involved quite a bit of manual labor. After you retire, it is important to stay in shape and continue to exercise regularly. Consider joining your local gym and signing up for one or more of the classes they offer. You can often choose from things like aerobics to swimming and even strength training. It all depends on your preferences and what you hope to get out of the experience.

#4 – Travel

These days, traveling does not have to take a gigantic chunk out of your retirement savings. You can often contact a travel agency and get a great deal on an off-season travel package to almost anywhere in the world. Consider visiting places like New Zealand, or even head out west to the Grand Canyon during the winter months. Not only are the crowds smaller, but so are the costs, and it provides you with an excellent opportunity to see the sights on a budget. You are no longer restricted by a work schedule, so be sure to make the most of it.

#5 – Be a Mentor

There is absolutely nothing more fulfilling than helping someone who is struggling, so consider becoming a mentor of some sort, whether this means tutoring high school students in math, teaching adults to read in literacy programs, or even spending time with disadvantaged children as part of Big Brothers and Big Sisters. All of these things can have a permanent, lasting impact on someone else, and there is no better way to spend your retirement.

Retirement is an exciting time of life, but if you fail to stay busy, you may find your well-being going downhill over time. Now that you have some extra time on your hands, put it to good use in satisfying ways by staying healthy, continuing to learn new skills, and helping others.  

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5 New Year’s Resolutions to Get Your Retirement on the Right Track in 2016

Whether you have not yet started planning for your retirement or your original plan got set back somehow, it is possible to get on track and start making your money work for your future. Here are five new year’s resolutions that will help you feel better about your retirement goals.

#1 – Hire a Financial Planner

If you have not yet hired an excellent financial planner, then this should be your top resolution for 2016. Planning for retirement is complex and difficult, particularly with all of the changes pertaining to the economy, tax laws, and more. If you want to make absolutely certain that you are on the right path to actually enjoying your retirement rather than struggling through it, hire a planner today. You will be glad you did, both now and in the future.

#2 – Start Contributing to Retirement Savings Plans

If you do not yet have a 401k account with your employer or even an IRA, make sure to start one – and start it soon. These are by far the best and most common ways to save for retirement, and the sooner you can start making contributions, the better. Remember that these contributions are pre-tax contributions, so you likely won’t even notice the small amount of money being taken from your payroll check each week. You’ll certainly notice it 30 or 40 years from now when you are ready to retire, though.

#3 – Look for Areas to Save More Money

Many people have 401k or IRA accounts, but find that they are not contributing quite as much as they would have hoped. If you find yourself in this situation, look for some ways to save money. Are you overpaying for your smartphone plan? Do you pay your cable or satellite provider for channels you never watch? Do you spend $5 a day on a cup of coffee? If any of these things sound familiar, start cutting back now. You might be surprised how much money you can save.

#4 – Pay Down Your Debts

The ultimate goal is to be completely debt-free with a sizeable nest egg when you retire. Many people make the mistake of assuming that they have 30 years to pay off their debts, so they do not get in a hurry to do so. However, time certainly goes by more quickly than we realize, and before these folks know it, they are five years away from retirement with $100,000 left on their mortgages. Taking the time to plan how you will pay off your debts before retirement is important.

#5 – Stay Healthy

Last, but most certainly not least, you need to include staying healthy as a new year’s resolution for 2016. This is important to retirement because you can’t enjoy yourself if you are unhealthy. Although there are some illnesses and conditions you simply cannot avoid no matter how hard you try, you can take care of yourself and your body. Do what it takes to maintain your health so you can work through your younger years and enjoy your retirement to its fullest.

Everyone looks forward to retirement, but that is only the case if you will be able to sustain a happy way of life once your income stops. These five resolutions will help you plan and coordinate in such a way that your retirement years are truly the happiest of your life.

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How to Instill Retirement Principles into Younger Generations

Young adults very rarely think about retirement. After all, they are young and they have their whole lives ahead of them. Although this is true, it is never too early to start thinking about retirement. Here are some tips for helping the younger generations understand the importance of saving for retirement.

Tip #1 – Show Them that Things Always Change

Once upon a time, people relied upon two main sources of income for their retirement: pensions and Social Security. Unfortunately, neither of these are as reliable as they once were. Social Security will only pay about 75% of its scheduled benefits after 2033, and Medicare, a primary source of healthcare funding, is looking pretty bleak, as well. This means that retirement will likely be much, much different for those who are in their twenties now, and they really need to start focusing on retirement planning as soon as they enter the working world. Teach kids that it is their responsibility to make sure that they can retire and that they cannot depend on anyone’s money but their own.

Tip #2 – Ask Them What They Expect

One of the absolute best ways to help instill retirement principles into younger generations involves asking them what they want out of their lives. Do they want to be able to retire at age 55, travel the world, and buy a Lamborghini, or do they just want to be able to live comfortably and retire at 65 or even 70? Either one of these things requires significant planning on their part. Help them figure out how much money it will cost (don’t forget inflation and a rising cost of living!) to maintain those lifestyles, and then help them figure out how much they need to save to get there.

Tip #3 – More Is Always Better

As we age, we are faced with many uncertainties. Some of these uncertainties revolve around our health. In the United States, the “retirement age” is 65 years old, but Social Security pays a higher benefit to those who continue to work until age 70 or beyond. Now, it is difficult to assume at the age of 25 that you will be healthy and able to work beyond age 70, and in most cases, it is best to plan for retirement at age 55. Then, if 55 comes and goes with no health issues, anything more that you can save in the next 10 to 15 years is a bonus.

Tip #4 – Leaving a Legacy Behind Them

As the younger generation gets older, they will have children and grandchildren of their own. What’s more, they will likely begin to think about leaving something behind for their loved ones. For this reason, it is important to consider more than just saving money for retirement. Someone in his or her twenties should also plan to pay off a home long before retirement age. Not only does this provide a solid foundation for an estate, but it also helps to ensure that they get to enjoy more of the money they saved through their lives.

All in all, teaching the younger generations about retirement and retirement planning does not have to be an arduous task. It all comes down to what they want out of their lives as they grow older. As long as they learn to rely primarily on themselves for their post-retirement income, they should have all of the information they need.

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