Video 3.1 Fill Ins

As you enter the workforce, it’s a good idea to be familiar with the components of an employee benefits package. Employee benefits are various _____ - __________ compensations provided to employees in addition to their normal wages or salaries. The purpose of employee benefits is to increase the financial security of staff members, and in doing so, improve worker retention across the organization.

Common employee benefits are retirement plans,

savings plans, ________________, leave (sick, vacation, etc.), stock purchase, educational reimbursement, incentive plans and cafeteria plans. In addition to considering salary when you are offered employment with a company, you should also evaluate the employer’s benefits package.

Simplified Employee Pension Plan (SEP): A self employed

person may deduct up to _____ of their net profit

on the business by investing in a SEP.

__________ is a retirement savings plan offered by a

corporation to its employees. The employee contributes

money to the 401(k) from his/her gross pay, and the

money in the account grows tax deferred. In some cases,

employers will match the employee’s contribution,

but you should fund your plan whether your company

matches or not.

403(b) is found in ____________________ organizations such as

churches, hospitals and schools.

457 is deferred compensation, which means you are

deferring or putting off compensation. Usually this is

available for ____________________ employees.

Do not use a Guaranteed Investment Contract (GIC)

or bond funds to fund your plan. This is like a CD inside

of your 401(k). You will only make about 3–4%, and it will

not help you win ___________ ___________.

Pre-tax contributions are taken from your gross

income before taxes. Taxes are due upon ________________.

_______-______ contributions are taken from your net

income after taxes. No taxes are due upon withdrawal.

Which of the following are key benefits of investing in a 401(k) retirement plan.

• Tax Advantage

• Employer Match

• Investment Customization and Flexibility

• Portability