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The good, the bad, and the ugly: part-time jobs with 401k retirement plans

With more and more college graduates of our generation joining the ranks of the service industry, there has never been a greater need for employers to offer 401k retirement plans. Some pioneering companies have answered the call and are starting to offer big benefits.

Perhaps it would be helpful for those just entering the job market to explain exactly what 401k plans are. Having a 401k means that employees can choose to put a certain percentage of their wages in an account before income tax is applied and they will not pay any tax until they access the account after retirement. It is essentially a tax break that helps people save money to support themselves when they finally retire. Until now, it has been more closely associated with full-time professional careers, rather than part-time jobs and other jobs that do not require a college degree. Another important aspect of the agreement is that employers often agree to match a certain amount of what employees choose to save, which can double the savings at best.

The company that first comes to mind when you think of service industry employers with 401k plans is Starbucks. In their system, benefits are available to what they call “benefit-eligible members” (that is, those who work more than 20 hours a week). Benefits include bonuses, health insurance, and discounted stock options. Your 401k options allow for a 25 to 125 percent range of matching employee contributions up to 4 percent of total salary. That, combined with the pound of free coffee Starbucks employees are entitled to, probably makes some employees very happy.

Whole Foods, another forward-thinking corporation, not only has a reputation for paying its customers more than competing supermarkets, but it offers more than 30 options for 401k retirement plans. The fund, which is created through Fidelity NetBenefits has more than 4,500 participants and contains $ 379,087,293, according to Future Advisor. The average 401k balance for those who choose to participate is approximately $ 8,000.

For today’s workforce, it’s definitely a good thing that more employers are participating in retirement funds. However, things are not perfect. One employer, Darden Restaurant, which already has a reputation for its terrible 401k plan, made headlines by making changes to the retirement floors to make them even worse. The company owns several high-volume restaurant chains across the country, including Olive Garden, Long Horn Steakhouse, and Red Lobster, so it is perhaps not surprising that they provide less than the most personal attention to their employees. Only about 13 percent of Darden employees participate in the unpopular program, and with stock prices falling, the options for investing retirement savings are not great.

For now, it seems like the options range from great plans like Starbucks deals to not-so-appealing deals from the Darden restaurant. Only time will tell if the examples set by progressive employers will garner a majority of followers.

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