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Fri, Apr 4, 2014 at 12:49 AM

US Retirement Plans

Living and growing up in United States can provide you with plenty of retirement plans options. Few of them are discussed below:

Employee Stock Ownership Plans (ESOP's)
These are the plans in which the employees in the capital of the respective companies are involved. There are five rules for the tax-deferred recognition of the ESOP’s:


  1. The contributor must be the company, the workforce, or both.
    • Exclusive beneficiaries of the ESOP are the workers.
    • Participation is open to any member of staff.
    • The ESOP rules must provide a reasonable schedule with staggered vesting periods for pension claims.
    • The annual contributions may not make up more than 25% of income during active service, and in no case exceed $ 30,000.

This type of pension has the disadvantage that you have to bind the person with retirement at a certain organization.

401k plans
For retirement, 401k plans in the U.S. are far better known than other retirement plans. This is about investment plans, in which workers can invest part of their salary in mutual funds of other companies.

The annual payments to a 401k plan may not exceed 15% of the taxable income of each employee in the form of salary and additional bonuses on performance. A contribution to a 401k plan is tax benefits for the workers in the form in which the investment amount from the respective taxable income can be deducted. For the companies the payments as additional services are also tax deductible.

Granted Stock Options (GSO)
Granted Stock Options (GSO) provides with the opportunity to purchase discounted shares of each company. Here, a certain holding period of the shares is usually prescribed. GSOs usually come with higher staff to bear. The U.S. system of capital and profit sharing for workers is only against the background of the low level of state pensions. Therefore Occupational Pensions have a much larger weight.
Retirement plans are important for every citizen. Every individual should opt for the plan that best suits him, resulting in higher returns.
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