A retirement plan is one of the best investments a person can make in a lifetime. Eventually, we will be too old to work. And when that happens, we need money to continue living. This is where the retirement plan comes into play. After being independent for most of your life, you wouldn’t want to depend on your children when you’re old. It is better that you have your own money to spend.

So while you’re still young and carving your career, find an employer that has a retirement plan in the form of the 401(k) plan. It is called as such because it is the number of the provision for such plan under the Tax Code. The employer sponsors this plan. The employer, through paycheck deductions, allows an employee to save part of his salary for the retirement plan.

BrightScope, a financial information company, regularly keeps track of American companies’ 401(k) plans. Here are this year’s top 7 401(k) plans:

1. Delta Air Lines

The company has $7.53 billion assets in plan. It only charges less than 0.25 percent per year. This is what employees are dreaming of: to have an investment that continually grows but at a very low account fee. Delta Pilots Plan got a 92.6 rating from BrightScope for its low total plan cost. Low administrator cost is good for both employer and employees.

According to Forbes, eight out of 10 small businesses fail because of insufficient cash. And when it comes to 401(k) plans, a company is expected to shell out part of the retirement plan as an employer counterpart. It is usually the same amount the employee wants to set aside, but usually not more than three percent of one’s salary.

2. National Football League

The athletic organization has $1.78 billion assets in plan. The National Football League Player Second Career Savings Plan is so good it has over 8,000 participants. The plan has a profit-sharing component. This means that the employer puts in a discretionary fund separate to its counterpart to the actual 401(k) fee that the employee sets aside. The discretionary fund will benefit all the full-time employees. This practice could very well increase the value of your 401(k) fund by the time you retire.

Profit sharing is closely linked to vesting. Investopedia describes vesting as the process by which an employee accrues on-forfeitable rights over employer-provided stock incentives or employer contributions made to employee’s qualified retirement plan account or pension plan. When it comes to vesting, though, there is a vesting schedule that has to be followed.

3. Saudi Aramco

This company has $1.95 billion assets in plan. The Saudi Arabian Oil Company has 4,400 participants with an average of $460,000 in account balance. Aramco is known for giving generous benefits package to its employees. The packages are designed to meet the different needs of different people and families. That includes a great 401(k) plan.

Another way to grow a 401(k) plan is through an index fund. It is a kind of mutual fund with broad market exposure with low operating expenses and low portfolio turnover. A lot of employers prefer having an index fund because as compared to all the other investments, this is kind of the no-brainer.

Another advantage to having an index fund is that it doesn’t require a large amount as cash on hand. However, index funds are not always big on cash flows. But that shouldn’t be a problem since 401(k) is really for the future.

4. Southwest Airlines

What is it with airline companies that they put so many premiums on a retirement plan?

Perhaps it’s because not a lot of people want to grow old living a gypsy life, flying from one place to another – always mobile. Southwest Airlines, through its pilot’s 401(k) plan, has over $3.20 billion assets. One thing that stands out in this company is that 15 percent of its asset is invested in Vanguard index funds. Vanguard has started the index fund for individual investors. However, the percentage is 82 percent lower than the industry average.

5. ConocoPhillips

With $6.88 billion assets in plan, ConocoPhillips is actually on a risky trajectory. Nearly 20 percent of the assets for its 401(k) plan are in company stocks. This is considered a risky investment for a company. That’s why this practice has considerably dropped over the years.

In 1999, most companies invest their 19 percent of their assets into the company stocks. However, 15 years later, the percentage was down to just seven percent. Ideally, if employees really believe in company stocks, they should limit their investment to 15 percent or less.

6. Amgen

This biotechnology company has some $3.99 billion assets in plan. Twenty-two percent of its assets in 401(k) plan are invested in company stocks. Another 18 percent is invested in a Northern Trust S&P 500 index fund. The latter is actually more dependable than the company stock. Northern Trust buy and sell securities in a bid to protect the retirement plan of the employees.

7. Bayer

Bayer, a pharmaceuticals company, has assets amounting to $4.26 billion invested in 401(k) plans. On the average, 401(k) participants contributed over $3,700 per person. Each participant has also contributed about $3,000 in deferrals. This prompted Bayer to actually move up 12 spots in BrightScope’s rankings.

The 401(k) is not really the best retirement plan. But it is good enough. This is literally like putting money in the piggy bank every month. But instead of opening it when it’s full, you open it when you have no more income. Imagine how fat the pig will be by then.

So whether some will argue that Roth IRA is the best retirement plan, 401(k) plan is better than not having any at all. This will already secure a future for you so that you don’t have to depend on anybody else when you’re old.

According to BrightScope, the best and fairest way to do the 401(k) plan in every company is the matching contributions between employer and employee. But you have to remember that this is not a requirement for every company. So you know that you are in a good one if there is a 401(k) plan.

Author's Bio: 

James Harnsberger is an NTPI Fellow, a credentialed paralegal in tax law and a champion of IRS reforms. I have aggressive posture in defending taxpayers before the IRS and has been in practice over 30 years. An exceptional public speaker and a very tough advocate for his clients.

He's also founder and CEO of the WEALTH & TAX GURU Coaching Program, a wealth transformation personal coaching program he developed to help empower every American in their financial life.

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