Social security trust fund

Assignment Help Financial Accounting

Reference no: EM133265617

Respond to the below post:

1. Government sponsored retirement plans are the schemes introduced by the government to help the retirees who are not a part of the companies or government departments. The amount collected as tax by IRS is given to social security trust fund.Then they allocate the social security income to the qualified people who are retired and their spouses. Person with disability will also get the benefit from this government sponsored retirement plan.

Not everyone will get the benefits from this scheme. Only qualified retirees who have no other income will get this social security benefit income.So it is not a good option to rely on it when you have some other option to get income after your retirement.

A Profit Sharing Plan or Stock Bonus Plan is a defined contribution plan under which the plan may provide, or the employer may determine, annually, how much will be contributed to the plan (out of profits or otherwise). A 401(k) Plan is a defined contribution plan that is a cash or deferred arrangement. Employees can elect to defer receiving a portion of their salary which is instead contributed on their behalf, before taxes, to the 401(k) plan. Sometimes the employer may match.

2. Mutual fund is a pool of funds which are managed by professional people who have the knowledge about the stock market and keep them updated about the whole world scenario and company track records both financially and other important aspects of the company. These mutual funds are regulated by the securities exchange board or commission and need to adhere all the rules laid down by them. They accumulate funds from all the investors and from this pooled funds they invest in different company securities. These funds are of different types such as debt fund, equity funds and balanced funds. Depending upon the investment time and goal of the investors, they should invest in different category of funds. Equity funds are of higher risk but at the same time they give higher returns . So people with higher investment horizon may invest in these funds. Investors who do not want to take risk and want to invest for shorter period of time , then they may invest in debt funds. Balanced funds is mix of both debt and equity fund. Portion of these funds are invested in both the categories. These funds are valued at NAV ( Net asset Value) and these NAV keep on changing on daily basis since their asset value changes daily depending upon stock prices. Some of the advantages of Mutual Fund are as follows-

1) Diversification

2) Managed by talented professionals

3) Highly liquidable

4) Lower cost

5) safety and transparency

Reference no: EM133265617

Questions Cloud

Encourage your trainers to enroll new members : You are a manager of a Wally's Training Gym and you encourage your trainers to enroll new members.

Create a wbs, with 3 levels of tasks and add duration : OPR725 Seneca College Create a WBS, with 3 levels of tasks and add duration. Create network diagram of the critical path of the project

Explain why they are effectively persuasive : Find an ad that has aired during the Superbowl in the past and provide link and explain why they are effectively persuasive

Net deferred tax liability : percent for the current year and for all future years, the transactions described above will result in a net deferred tax liability

Social security trust fund : FIN 447 National University College Person with disability will also get the benefit from this government sponsored retirement plan

Digital forensic conglomerate operated by maryam : A digital forensic conglomerate operated by Maryam, Sara, and Dana, was appointed as the technical adviser to the CEO of CovidPrevention Plc.

Discuss the differences between the repricing model : Discuss the differences between the repricing model and duration model and identify why does duration model is more complete than the repricing model

What is the approximate difference in your mortgage payment : FIN 881 Suffolk University what is the approximate difference in your mortgage payment today if you bought the house at the current price and under current

People pass through entry kiosk at theater : As people pass through an entry kiosk at the theater, they are prompted to enter their age.

User Account

All Pages