Brut Force - 20th Edition - Brutoco

10
ESoP
by
Don
BrAKE
THE BRUT FOrCE
retirement may seem a long way off and often other priorities in our lives such as saving for a home
down payment or your kid’s college tuition push it to the back burner.
The ESoP is just one part of a comprehensive retirement plan
The Employee Stock Ownership Plan (ESOP) is the primary retirement plan offered by Brutoco. The
plan provides for the company to contribute Brutoco stock to your account each year and permits the
employee owners to share in the success of the company.
Because the value of the ESOP is solely dependent on the value of Brutoco Stock, it is important to
consider diversifying to some extent using other tax-advantaged options.
Participate in the Brutoco 401k Plan
a key strategy to ensure that saving for retirement is not completely out of mind is to participate at some level in the
Brutoco 401k plan.
The plan allows you to set up automatic, tax-deferred deductions from your paycheck. You can start with a small
amount such as $50 per paycheck, and then increase the amount as circumstances permit. Because the deductions
are tax-deferred, the decreased amount of your take home pay will be up to one-third less than the amount you are
having deducted. For example, for a contribution of $50, your paycheck is reduced about $34.Getting started at this
level will only cost you a little over $1 per day and the automatic nature of the deduction makes it less noticeable.
On the other hand, if you want to maximize your ability to save for retirement, the current annual limit is $17,000 for participants under 50 years of
age and $22,500 if you are 50 or older.
Brutoco’s 401k is administered by John Hancock and offers over 40 investment options so you can tailor your participation to fit your life situation.
John Hancock also offers the ability to track and change your investment choices on the web.
To start participating in the 401k, simply request an enrollment package from the Hr Manager Sharee’
andrade.
Another option is opening a Roth IRA
a roth Ira is an individual retirement account that you fund with after-tax dollars, but when you withdraw
the funds at retirement the investment earnings are free from federal and state income taxes.
This arrangement can be a great deal, especially if income tax rates in the future are higher than they
are today. roth Ira accounts can be set up with mutual fund companies such as Vanguard or Fidelity or
Brokerage firms such as Schwab or E-trade.
Calculate your estimated Social Security Benefit
Check out the retirement benefit estimating tool on the Social Security website at http://www.ssa.gov/
estimator/. This tool uses your work history in the Social Security database to estimate your expected
monthly benefit at various retirement age assumptions.
Start as early as possible, BUT don’t let a later start discourage you
Starting as early as you can with your retirement planning is a big advantage, since you will be able to maximize the power of compounding your
contributions and investment earnings over a longer portion of your working years.
a later start will mean less time to accumulate; however, the discipline of regular contributions to your retirement plans will serve to help you live
within your means by artificially lowering your income, which indirectly lowers the difference you might experience between your pre-retirement
income and your post-retirement income.
Please feel free to contact Don Brake with any questions you have regarding the retirement planning options discussed in this article.