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Question: DROP DOWN OPTIONS!! 1a. (gradual / full) 1b. (three / six) 2a (gradual / full) 2b. (three / six) ...

DROP DOWN OPTIONS!!

1a. (gradual / full)

1b. (three / six)

2a (gradual / full)

2b. (three / six)

3a. (noncontributory / contributory)

3b. (paid by the company / shared by employer and employee)

3c. (benefit / contribution)

3d. (we all / they / we)

4a. (pretax / after tax)

4b. ( what we can afford / an IRS- set maximum / the maximum set by plan provisions)

5a. (contributions / benefits)

9. Evaluating employer plans What Retirement Plan Options Are Available? You are either current employee or a future one, and it is your responsibility to make sure that you familiarize yourself with the basic and supplemental (voluntary) plans an employer may offer Recall that there are noncontributory and contributory pension plans. These often stipulate vesting requirements. Within these type of plans, there is a defined contribution plan or a defined benefit plan Also, many employers offer supplemental or voluntary programs such as profit-sharing, thrift and savings, and 401(k) plans. Lexi and Luke are new employees. They've been reviewing the information they gathered at a new-employee benefits meeting they attended today. personal finance class, so they are helping each other complete the notes they've taken They both have taken LEXI: I heard the HR manager say that the company uses the cliff vesting schedule. I'm not sure what that means. years LUKE: Oh, I remember this from personal finance class. Cliff vesting requires vesting over LEXI: What's the other option? LUKE: Graded schedule. Vesting is years over LEXI: Did you understand everything about the pension plans? LUKE: No, can you help there? LEXI: Sure, it's a good plan where we both participate at set amounts. So it is a plan, which means that the contribution cost is In addition, it a defined plan. That means that the plan states how have to contribute. much LUKE: I thought I heard her say that they offer two supplemental plans, but I only wrote down one, the traditional 401(k) plan. It's the type of plan where we can contribute up to LEXI: Oh, the other plan she mentioned is the profit-sharing plan LEXI: Because our employer is a big Fortune 500 company, our plan is voluntary. It takes everyone's and heavily invests it in company stock LUKE: Well, I think I have my notes complete. I may need to clarify a few things that will apply just to me, vesting, profit-sharing percentages, and retirement age. LEXI: Agreed. Thanks for helping me complete my notes too