How To Set Up A 401(k) Retirement Plan
Wednesday, January 2nd, 2008A number of people think the only way to set up a 401(k) Retirement Plan is through their employer. That is not the case. You may enroll through your employer, but also throught your bank, financial service firm or your insurance company.
Most employers offer some sort of retirement plan. These plans are referred to as “Employer Sponsored Retirement Plans”. Your employer’s Human Relations Department or Benefits Department generally works with an outside investment banker or insurance company to administer the retirement accounts. Larger employers automatically enroll their employees in a 401(k) reitirement plan. Smaller companies may require each individual employee to “opt in” to an account; by requesting participation in a plan. In this case you will have to work with your employer to ensure all of the appropriate forms are completed.
If your employer does not provide any form of 401(k) retirement plan. In that case, you will have the option of personally establishing a 401(k) retirement plan with your banker, financial advisor, or insurance agency. In this case, you may have the advantage of setting up and managing investments personally through certain investment plans available.
You should discuss your options with your employer first; then discuss plans offered through your bank, financial investment service company, or your insurance agency. In choosing the appropriate 401(k) retirement plan for you, consider your investment experience. If you are inexperienced in the investment environment, you may want to rely on experienced representatives to manage your account in the beginning.
