What types of retirement funds are offered by federal and state governments? How have these changed...

What types of retirement funds are offered by federal and state governments? How have these changed over time?
Why do you think that we have more types of these now?

Expert Solution

ANSWER:

They are covers two types of retirement plans: defined benefit plans and defined contribution plans.

A defined benefit plan promises a specified monthly benefit at retirement. The plan may state this promised benefit as an exact dollar amount, such as $100 per month at retirement. Or, more commonly, it may calculate a benefit through a plan formula that considers such factors as salary and service - for example, 1 percent of average salary for the last 5 years of employment for every year of service with an employer. The benefits in most traditional defined benefit plans are protected, within certain limitations, by federal insurance provided through the Pension Benefit Guaranty Corporation (PBGC).

A defined contribution plan, on the other hand, does not promise a specific amount of benefits at retirement. In these plans, the employee or the employer (or both) contribute to the employee's individual account under the plan, sometimes at a set rate, such as 5 percent of earnings annually. These contributions generally are invested on the employee's behalf. The employee will ultimately receive the balance in their account, which is based on contributions plus or minus investment gains or losses. The value of the account will fluctuate due to the changes in the value of the investments. Examples of defined contribution plans include 401(k) plans, 403(b) plans, employee stock ownership plans, and profit-sharing plans.

Different Types of Retirement Accounts

Traditional Individual Retirement Arrangements (IRAs) ...
Roth IRAs. ...
401(k) Plans. ...
SIMPLE IRA Plans (Savings Incentive Match Plans for Employees) ...
SEP Plans (Simplified Employee Pension) ...
Payroll Deduction IRAs. ...
Defined Benefit Plans. ...
Employee Stock Ownership Plans (ESOPs)

ekkarill92 answered 1 year ago

In Australia, the Federal and State governments can raise funds by issuing bonds. Please list the...

In Australia, the Federal and State governments can raise funds by issuing bonds. Please list the major investors names of these fond .

What was the impact of federal, state, and local governments on the American economy and civil...

What was the impact of federal, state, and local governments on the American economy and civil rights in the 1950s.

what the governments (Local, State and Federal) are doing to address the economic conditions created by...

what the governments (Local, State and Federal) are doing to address the economic conditions created by the pandemic covid 19. First identify a current government policy you are aware of and identify its components. This is the “macro” overview. Then, describe how this policy, remember, it can be a local (city/county), state or federal, is intended to impact a specific industry, firms and/or individuals. This is the “micro” overview.

What "general rule of thumb" was given regarding the federal and state governments' approach to voting?...

What "general rule of thumb" was given regarding the federal and state governments' approach to voting? Do most states follow the plurality rule or majority rule?

What is the Constitutional role of state and federal governments in healthcare, i.e. states’ rights, police...

What is the Constitutional role of state and federal governments in healthcare, i.e. states’ rights, police powers, tenth amendment.

What types of cases do the state courts have authority to hear? What about federal courts?...

What types of cases do the state courts have authority to hear? What about federal courts? Practically speaking, why would our country have this multi-tiered court system?

Discuss the different types of mutual funds offered by financial institutions, and the types of investors...

Discuss the different types of mutual funds offered by financial institutions, and the types of investors they attract based on investment risks. What are some inherent risks and opportunities mutual funds face?

Problem 2. Medicaid is jointly funded by the federal and state governments. States receive federal matching...

Problem 2. Medicaid is jointly funded by the federal and state governments. States receive federal matching funds and have great flexibility in implementing the program as long as they meet a core set of requirements. In recent years, there have been discussions on how to reform Medicaid financing. Among various proposals, Medicaid block grant and per capita cap have received the most attention. a. What is Medicaid block grant? How can block grant affect Medicaid enrollment and benefits? Please explain....

Are most aspects of elections under the control of state governments or the federal government?

Are most aspects of elections under the control of state governments or the federal government?What do states decide in terms of elections?

pharmaceutical industry is regulated by both the federal and state governments. The FDA is the primary...

pharmaceutical industry is regulated by both the federal and state governments. The FDA is the primary federal agency that regulates the approval and sale of drugs. State licensing boards generally have responsibility for the distribution and sale of prescription drugs within a state’s boundaries. The FDA regulations are intentionally written to make it difficult to get new drugs approved to market to the public. Tell me at least three reasons why the federal government would want to make the approval...

Question