Saving For Retirement With A 401(K) Plan

  401(K) plans have become popular in recent years because many believe they are the best way today for employees to save for retirement.

  When a company has established a 401(K) plan, participating employees can have up to a maximum of $11,000 (for 2002) invested for their retirement, and get a tax break as well. For example, if an employee in the 27 percent tax bracket contributes $5,000 to a 401(K) plan, that employee pays $1,350 less in taxes to the government. Therefore, the employee is investing $5,000 for retirement but it costs him or her only $3,650. The investment will grow tax free until retirement, when taxes are paid as the money is distributed.

  Plans may offer a company match, where the employer matches a portion of the employee's contribution. This can give an immediate 50 percent to 100 percent return on that portion of the employee's contribution. Plans can also have a loan provision, where employees can borrow their own funds and make payments of principal and interest back to themselves.

  A D COMPUTER has the advanced computer software that is necessary to administer the deductions, calculate the proper taxes and provide the reporting required by 401(K) plan administrators.

  A D Computer has working alliances and relationships with a number of professional Retirement Plan Administrators. If you are starting a new plan or need administration of an existing plan, we can help. Whether you’re looking for specific contribution reports, a data file or even a seamless exchange of payroll data... we have various solutions available.

A D COMPUTER
3939 West Drive
Center Valley, PA 18034
610-797-9500
1-800-DO-MY-PAY
1-800-366-9729