A new employee joins your company at age 24 making $40,000 per year.

A new employee joins your company at age 24 making $40,000 per year. Currently, banks are paying 5% interest on saving accounts, and the rate of return on the company stock is 4% per year. During benefits enrollment, the employee stated that she would like to retire at age 60 with 3 million dollars in her retirement account.

Compare the following retirement options for this particular employee in 1,050 to 1,400 words:

403B
401K
Pension
Annuities
IRA
Estate planning
Determine which retirement option(s) you would choose if you were this employee.

Assess the factors that this employee should consider when selecting a retirement plan.

MODEL ANSWER

This paper discusses the selection of a suitable retirement plan based on the needs and benefits of a 24-year-old employee who has just joined a company that is paying her a yearly income of $40000. It is also imperative to note that the banks are paying 5 percent on savings account per year and the rate of return on the company stock is 4 per cent annually. The employee in this case study intends to retire at the age of 60 years with an expected pension of about $ 3 million. This paper considers different retirement plans such as 403B, 401K, annuities, pension, IRA and estate planning.

Retirement Plans

401(K) When you calculate the total earnings of the thirty-six years that the employee will be attached to the company and his total savings, it is clear that the overall profits from the retirement plan will be $237,809 U.S dollars. Moreover, the 401(k) retirement plan will not allow the employee enough flexibility. It is also clear that in the context…