Sample Essay
The second benefit of the 401k plans is that the 401k plan has the characteristic whereby the employer matches the contribution of the employee in the investment under the retirement savings plan. This matching of funds can be equal to the contribution made by the employee or more than the funds that have been set aside by the individual. This is equal to free money for the employee as the employee is not liable or responsible to make the company match the contribution. Instead the employees’ number of years in service determines the matching percentage. Starbucks in an organization which matches the contributions of the employees under the 401k plans from as little as 25 percent matching to as much as 150 percent.
The 401k plans also provide the employees with the option of making customized investments. The employees can determine their own tolerance of risk and select the best suited option for their investment that can take the form of investing in the shares and stock options, investing in the capital market or even mutual funds. Aside from this the 401k plans also provide the employees of the organization to rollover their retirement fund investments under the 401k plans to another employer in the event of changing jobs or companies.
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