The three-legged retirement stool concept consists of Social Security, pension and profit-sharing plans, and personal savings. Your employer is responsible for the pension leg. You are responsible for understanding the profit-sharing plans and taking advantage of the tools provided to help you with the personal savings leg. If you are working for a large employer, you most likely have more than one type of retirement plan available to you. These plans, in general, are known as "qualified" plans because they meet Internal Revenue Service guidelines that offer certain tax privileges. As long as you and the company continue to follow IRS guidelines, both parties will enjoy current tax benefits.
While some plans may be fully paid by your company, other plans may require you to make a contribution. Unfortunately, many employees fail to take the time to know how their company plans work. Do you know if you are eligible to receive a monthly benefit from your employer when you retire? Do you know what the formula is based on? Do you know how much you can save in your company's retirement plan? Employees should become familiar with all the features of their company plans.
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Infinex and First Commonwealth Bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.
*We do not provide tax advice. Consult your tax advisor.
*Diversification is a method of controlling risk. It does not assure a profit or the avoidance of loss.
**Dollar-cost averaging is a method of controlling risk. It does not assure a profit or the avoidance of loss. Investors should consider their ability to continue a dollar-cost averaging program in periods of declining markets.