Saturday, January 16, 2010
Retirement plans remain a good deal
Ever since the economy tanked in 2001, a lot of people began to hate retirement plans. I can't tell you how many of my tax clients, when I asked if they wanted to put money into an IRA or other retirement plan, said to me, "No. All the plan has done is lose money. Or the plan has hardly made any money. Why would I add to it?" The thing is, retirement plans themselves are still a great deal. The investments held in many of those plans haven't done well, but the plans themselves — the shell within which the investments are placed — are still sound. Employers as well as employees should remember this. Retirement plans give employees the chance to set aside some of their wages tax-deferred, producing an immediate benefit in terms of reducing current taxable income and income taxes. Employers get something out of the deal as well. No employee benefits package today is considered complete without some type of retirement plan. At a relatively modest cost, employer-provided retirement plans can improve overall company morale and make a business more attractive to current and potential employees.
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