August 2023

up contributions based on years of employment, rather than age. Vesting relates to ownership of contributions into an individ ual’s retirement account. As discussed above, there are typi cally two types of contributions to a retirement fund: employee contributions (which are withheld directly from an employee’s paycheck) and employee matching contributions. Individuals always have full ownership (i.e., 100% vested) of their direct contributions. Vesting comes into play when dealing with the employer match. Many organizations stage your ownership of the matching contributions based on years of service with the company. Generally speaking, 403(b) plans offer shorter vesting periods than 401ks. Pensions: This type of retirement plan has become less common over the years due to the high employer costs associated with maintaining a healthy fund. A pension plan is similar to a 401k or 403(b) in that employees will con tribute to the fund throughout their career. While the terms of those contributions differ, the concept is quite similar. The differences become significant however when turning the focus from contributions to distributions. A pension is a

“defined benefit” plan, which means that the annual distri bution made to an employee is locked in for the full term of their retirement. This is a very attractive option because it eliminates any risk of market volatility. This is what has made this plan less common over the years, as companies

struggle to absorb the cost of maintaining the plan during times of poor market perfor mance. IRA: IRA stands for “individ ual retirement account”. This investment vehicle is a long term savings account origi nally created to help self-em ployed individuals originally

“...this type of account is open to any individual that earns an annual wage.”

created to help self-employed individuals save for their retirement, as they do not have access to an employer-spon sored 401k. However, this type of account is open to any individual that earns an annual wage. The main differences between an IRA and a 401k are that there are no match ing contributions from the employer, and that individuals CONTINUES ON PAGE 22

Management of Residential, Commercial, Industrial

REAL ESTATE SALES & LEASING

ABOUT US At Complete Property Management, we maintain and care for properties as if they were our own. We customize a management program specific to your property’s needs to ensure that it receives the attention required to maintain it’s appearance and value.

We service properties located in Morris, Hunterdon, Warren, and Sussex counties.

WE SPECIALIZE IN • Condominiums - Residential & Offices • Townhomes • Adult Communities • Commercial • Industrial • Rentals • Sales

Call Today: (908) 879-5106 555 East Main Street | Chester, NJ 07930 www.completepropertymanagementnj.com

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AUGUST 2023