How should I use my company's profit sharing plan?
Topic: Company planning
June 19, 2019 / By Diane Question:
I just got a job I have wanted for a long time and am very happy with the pay and benefits...that I understand. The only benefit I don't understand is the profit sharing plan. I plan on asking them about how it works with them but just got hired last week and don't start until the 29th. All I know is that they offer a "quarterly profit sharing plan". I haven't been able to find much online to help me get a general understanding of how to utilize this to my benefit. I also have immediate eligibility to a 401k with a company match if thats important at all. There are other benefits but I don't think they are relevant to a profit sharing plan. Anyway, could someone please try to explain to me how to use this plan? I read something about pairing it up with my 401k somehow? I don't know anything about it so let me know what you know haha. The company is getting huge and is growing like crazy right now so I want to capitalize on that as much as possible. Oh, and theres also some sort of stock option purchase plan but I dont think I want to dabble in stocks at this time. Thanks in advance!
by the way- I will be checking in on the status of this question frequently so if you want more info, just let me know. Thanks!
Huntsman-So is there normally something you have to do? Like tell them "yes i want to buy into that" or is it just something thats tacked on? Thanks for your insight though, much more than I have been able to find for whatever reason
Zuma and Efflandt- Thanks a lot! Both of your answers are very helpful! I will try and find out what the funds available are and get back on here.
Best Answers: How should I use my company's profit sharing plan?
Caramia | 5 days ago
Quarterly profit sharing would be a bonus based on how profitable the company is. There is nothing you need to do to participate other than to do your job well and efficiently. It is just nice to get an extra check like that now and then, sometimes when you really need it.
If our when you participate in their 401(k) plan with payroll deductions, the same percentage would likely come out of the profit sharing pay towards you 401(k). Company match means that the company adds additional (free to you) money to your 401(k) plan based on what you contribute to it.
👍 138 | 👎 5
Did you like the answer? How should I use my company's profit sharing plan?
Share with your friends
We found more questions related to the topic: Company planning
Originally Answered: Can I roll over 457 retirement plan (set up with a non-profit) into an IRA?
By annuitizing you will liquidate your money. It will be readily available to you approx. 10% per year without a penalty can be w/drawn. It's also tax deferred so Whatever the rollover fee, which I'm not sure why you'd have to pay one unless your w/drawind some cash in a fixed time period. Or its because your not of retirement age, but what state are you in and Maybe I could further assist you. My company specializes in seniors and would love to help, just email or respond in additional info.. Good luck, your annuity would be the best suggestion. Because even your 457 is tax deferred until withdrawl. Good planner I see.. good luck..
You should get the list of Funds available, then come back ...It's not something you want to rush through.
Only put money in tax deferred accounts that you believe you'll never need to touch till you retire,..otherwise it would cost you a serious penalty,....But the sooner you get started, the better off you are.
And if you don't come back, be sure to at least take the dollar for dollar match,..That's like 50% off company stock.
👍 50 | 👎 -1
Separate from 401K. Although you could put some of it into your 401K.
Think of the profit sharing as income. (or bonus)
👍 46 | 👎 -7
Originally Answered: What can I do if my company lies about gross profit/commission?
No, no court case -- esp if you are a non contract employee. (A contract employee would have the rules for paying commission written in black and white)
My simple explanation gives you two related reasons why you are unlikely to prevail in court even if your employer is trying to "cheat" you.
(1) Your employer -- without a written document saying otherwise -- is legally able to define gross profit for any business purpose as he sees fit. There is nothing wrong with dozens of separate definitions of "profit" in a company, let alone two. I worked for a company that paid most salary via commissions and bonuses and each layer of management had a separate working definition of profit that applied to them.
(2) There are many simple, legit reasons for defining gross profit for commission purposes differently than gross profit for financial accounting purposes. That is, not specifically for the purpose of paying you less. Among the most simple are the way in which particular cost "layers" are added to cost in standard accounting. Some layers unrelated to your sale might be excluded from the payment to you but required for the company's standard accounting...things like overhead and administrative expense...and sales commissions.