Introduction
The selection of a retirement plan is an important task and a responsibility of any employee. When it comes to retirement planning, there are many options from which contemporary workers can choose. However, it is important to have detailed knowledge and understanding of the available retirement plans for one to make the right choice. In this paper, six retirement planning options will be discussed and compared for the purpose of choosing the most appropriate one for the specific employee whose intention is to retire at the age of 60 with 3 million dollars on her savings account.
403B
403B stands for a savings account with deferred taxes. This plan is commonly offered to public sector employees and workers of non-profit organizations. Practically, this plan represents the investment in an annuity. The investor is obligated to make contributions and, in exchange, they receive a certain percentage of interest repaid on a regular basis throughout the entire term of the investment.
The main benefit of this plan is that a steady level of income may be generated over a lengthy period. Additionally, using this plan, investors are also able to control the amount of income tax that they pay (Phipps, 2018). The calculations for this plan included such variables as employer maximum and employer match which were set to a maximum of 48% of the current annual salary of the given employee (18000 dollars).
With the annual contribution set at 10% (approximately 333 dollars per month) of salary and the current amount of 30000, the employee will have a 1.148.657 dollars balance at retirement. With the current amount of 0 dollars, the balance at retirement equals 1.025.539 dollars. Raising the annual contribution to 20% (666 dollars per month), the employee receives 1.335.933 at retirement. Neither of these options matches the desired 3 million.
401K
401K is another retirement plan option. This is a saving plan that is sponsored by a worker’s employer. The principle underlying this plan resembles the one of 403B. Practically, using this plan, employees have a chance to preserve a portion of their income from taxation because taxes are paid after the account owner withdraws money (“What Is a 401(k)?,” n.d.). The benefits of this plan are also similar to the advantages offered by 403B.
Using this plan, an individual has an opportunity to maintain a savings account with regular contributions and receive a percentage of interest on a regular basis. The calculations for this plan showed that the number that is the closest to the desired 3 million dollars could be reached only if the given employee has an annual salary growth rate of 10%. In this case, in 36 years, she will have a balance of 2.579.199 dollars. These calculations also included the contribution rate of 10% and the 3% inflation. A similar result (2.510.798 dollars) will be achieved with the 30% annual contribution and salary growth rate of 3%. These results show that a 401K plan is a good option, but it requires to be used in combination with some other plan.
Pension
Occupational pensions stand for tax-deferred forms of compensation. They are beneficial for employees and workers. A pension scheme revolves around an account where sums of money are added on a monthly or annual basis. After an employee reaches pension age, periodic payments are made to them using this pension account. This way, an employee creates a retirement plan for themselves making contributions throughout their working years. However, for the selected employee, this plan does not seem like a suitable option because her desire is to have a savings account with 3 million dollars but not a pension account.
Annuities
Annuities are insurance products. Their function is to perform regular payments and provide income to the individuals who invest in them. Annuities represent one of the options for a retirement plan. Often, they are used as parts of retirement strategies (“What is an annuity?,” 2018). The amount of income generated by an annuity usually is in a tight connection with the amount of the investment that underlies it. The major issue with annuities is their high cost. Practically, one needs to be financially secure enough to be able to afford the expenses that come with annuities. For the given employee, this retirement plan option may be unsuitable because her overall annual salary is not high. As a result, it would not be practical to invest in an annuity without the appropriate level of financial security.
IRA
An IRA is another tax-free or tax-deferred retirement plan option that is based on the establishment of a savings account at a financial institution. There are three kinds of IRAs, each of which has different kinds of benefits – traditional, Roth, and rollover IRA. The major advantage of an IRA is that it can be used in combination with some other retirement plan option (for example, a plan sponsored by the employer such as 401K or a 403B).
In order for an IRA option to be beneficial, it is important for the employee to raise the regular contribution rates to the maximum so that the generated level of income is as high as possible. A Roth IRA with a 5% rate of return, a starting balance of 10000, and a 10% annual contribution (4000 dollars) would generate 460.431 dollars balance at retirement. Combined with a 401K plan with another 10% contribution, this option could bring the given employee to the desired 3 million dollars on her account at the age of 60.
Estate Planning
Estate planning is one of the options that most employees prefer to use even on a basic level. The main benefit of estate planning in terms of income is that it can be arranged in a way to reduce taxation as much as possible. However, estate planning is not suitable for being the only option for one’s retirement plan. Moreover, it is only suitable for individuals who have valuable possessions and are estate owners. The given employee is in her early 20s and thus is highly unlikely to be an estate owner. As a result, estate planning may become a viable and advantageous option as a part of her retirement plan in the future. Currently, this option is not of much use for this worker.
Conclusion
Having done some calculations, it is possible to conclude that the best retirement plan option for the given employee is the combination of an IRA and a 401K plans. However, using this option, she would have to be prepared to make a 20% contribution to her accounts every year. These estimations are based on her current direct compensation size. It is likely that as her career progress, her salary might grow and it would be easier to match the requirements of her retirement plan. These are the factors that she would need to consider choosing the plan, alongside the rate of inflation and her potential housing options.
References
Phipps, M. (2018). Explanation of a 403(b) retirement plan. Web.
What is a 401(k)? (n.d.). Web.
What is an annuity? (2018). Web.
Cell Phone Use While Driving: Why Is It Dangerous?
Introduction
The invention of cell phones allowed people to have a constant connection to their family, friends, and colleagues. Later, smartphones became the norm, and this connection expanded to include the Internet and all ways of communication enabled by it. It was only a matter of time until using a cell phone while driving would prove to be extremely dangerous. This paper will show how the use of cell phones while driving leads to dangerous driving and possible fatalities on the road.
Discussion
Text messaging while driving is one of the most common instances of cell phone misuse. It has already been proven to be a dangerous activity that can lead to distracted and careless driving. Accidents caused by texting and driving are common and can end in fatalities. A meta-analysis of research on texting and driving has found that reading and writing text messages on cell phones have a consistently adverse effect on the safety of driving. The act of texting provides a considerable visual, cognitive and physical distraction to the driver and should be avoided (Caird, Johnston, Willness, Asbridge, & Steel, 2014).
A variety of alternative solutions to texting and driving have been proposed and implemented such as voice-assisted typing, which allows the driver to say the message out loud instead of typing it, or augmented reality texting through devices such as Google Glass (He, Choi, McCarley, Chaparro, & Wang, 2015). Neither are perfect solutions, however, as they still provide a level of distraction that could cause accidents on the road.
A slightly less dangerous activity that drivers engage in on their cell phones is also the oldest one. Drivers have been able to take and make phone calls from their cars since the invention of the car phone. While originally it was a luxury feature, with time more options have enabled ordinary people with the same activity. Due to the long history of the activity, a larger body of research has been gathered on the issue. Besides the direct use of the phone, activities such as hands-free talking have been examined, as well as talking while using the technologies integrated into the car itself.
The results vary between different research papers and methods of cell phone use. Some papers show a clear adverse effect not only on the driver’s awareness of the road but on the driver’s awareness of the quality of their driving. People whose driving while talking were tested in a simulated environment have experienced a significant number of accidents but afterward provided a completely inaccurate assessment of their driving.
Multitasking of any kind in the process of driving should rarely be done rarely and with caution (Sanbonmatsu, Strayer, Biondi, Behrends, & Moore, 2015). However, some researchers find this issue less prominent. A different paper found that after analyzing the phone activity of the drivers who utilized various methods of cell phone communication, the correlation between near-accident situations and phone activity was not so direct.
A more surprising discovery from the same paper claimed that the observed drivers actually spend less time looking at the road when using vehicle-mounted hands-free cell phone calling than hand-held phone users. The results indicated that the adverse effects on the drivers were limited (Fitch et al., 2013). Nevertheless, the issue has not been resolved, and it is likely that it will go on in the near future.
Lastly, one of the less-discussed aspects of this topic is the increased use of cell phones while driving by people with symptoms of ADHD. Aside from the previously discussed negative effects of texting and talking on the phone, people with ADHD symptoms have shown a greater propensity for using social media sites while driving. Reduced self-esteem and increased stress are often caused by the symptoms of ADHD, which leads to a craving for social media use.
The symptoms can have an effect on the person at any time, and this includes the moments when the person is driving. The practice of using social media sites while driving has been assumed to be a problem among people with ADHD symptoms even before any research on the matter was conducted. Unfortunately, the research has shown that the frequency of this activity may be much higher than it was previously considered. The use of social network sites is viewed as compulsory reward-seeking behavior, and therefore, a solution to mediate the issue should be found (Turel & Bechara, 2016).
Conclusion
The use of cell phones while driving in all aspects should be considered a dangerous activity. The currently devised technologies to sidestep its distracting effects have shown to be less than effective in keeping the driver’s attention on the road. Also, the increased danger of cell phone use for social media sites by people who do so compulsory should be given a larger degree of attention, as the research on the matter is relatively thin. Therefore, further research on the topic of cell phone use during driving should be focused on possible novel techniques that could either allow cell phone use with negligible loss of attention, or ways of preventing cell phone use all together.
References
Caird, J., Johnston, K., Willness, C., Asbridge, M., & Steel, P. (2014). A meta-analysis of the effects of texting on driving. Accident Analysis & Prevention, 71, 311-318.
Fitch, G., Soccolich, S., Guo, F., McClafferty, J., Fang, Y., Olson, R., … Dingus T. (2013). The impact of hand-held and hands-free cell phone use on driving performance and safety-critical event risk. Web.
He, J., Choi, W., McCarley, J., Chaparro, B., & Wang, C. (2015). Texting while driving using Google Glass™: Promising but not distraction-free. Accident Analysis & Prevention, 81, 218-229.
Sanbonmatsu, D., Strayer, D., Biondi, F., Behrends, A., & Moore, S. (2015). Cell-phone use diminishes self-awareness of impaired driving. Psychonomic Bulletin & Review, 23(2), 617-623.
Turel, O., & Bechara, A. (2016). Social networking site use while driving: ADHD and the mediating roles of stress, self-esteem and craving. Frontiers in Psychology, 7, 1-10.
Employee Retention Committee’s Meeting Failure
Omissions and Occurrences
The presented case study describes a situation where an Employee Retention Committee is attempting to have a meeting, but it fails for a variety of reasons. The committee consists of only four people but the organization was mishandled almost completely, and no results were achieved at all. The first reason for its failure was the poor messaging on the part of the organizer. One of the members forgot about the meeting and was not reachable by phone.
This resulted in an additional delay in the meeting. The second issue comes from the lack of logistical support for the members. This is perhaps the largest issue with the presented meeting. The room was much too small for four people, and no larger spaces were available during the meeting. An additional chair needed to be brought into the office. Printouts of important information were not prepared in advance.
Finally, the administrator did not prepare his information from the previous meeting that he wished to discuss. All of the members treated the meeting as if it dealt with an unimportant issue, which seriously undermined their motivation to contribute to the committee. Another issue comes from the lack of consideration for schedules that others had prior to the meeting. This would be a lesser issue if it was not for the combined effect of all the previous problems which made the meeting impossible (Lisic, Neal, Zhang, & Zhang, 2016).
Preparation is essential for the improvement of the presented Employee Retention Committee. Its chairperson should have prepared a suitable room for the meeting, printouts out all the relevant information, and reminded all the members about the meeting at the beginning of the workday. The meeting itself should have been scheduled in such a way that it would not conflict with the schedules of others if any unforeseen delays occur.
The mission of this committee is very important for the company. Therefore, it should be clearly established that if this committee fails to produce results, the company would lose productivity and start declining. All the members should be aware of their responsibilities as well. While providing logistical support and preparation would likely motivate the members to take the meeting more seriously, all the described elements should be considered for improvement (Serrat, 2016).
Composition and Membership Improvements
The composition of the committee presented in the study is relatively viable, but it could be improved. It is unknown whether the Hospital has special requirements for the organization of committees which makes it more difficult to determine whether it does or does not meet them. My goal for the committee would also be focused on the reduction of undesirable turnover. To achieve this, I would make sure that all the members who do not have a consistent amount of time available for meetings would have other people from their department available as substitutes. In addition, I would make sure to perform my duties as a chairperson in a much more effective manner.
This would be achieved by ensuring that all the aspects related to team composition and committee support are maintained carefully. The majority of the issues that the presented committee experienced could be resolved through better leadership on the part of the chairperson. Unfortunately, almost all of the required elements were neglected, used ineffectively, and in general were handled poorly (Lisic, et al., 2016).
References
Lisic, L. L., Neal, T. L., Zhang, I. X., & Zhang, Y. (2016). CEO power, internal control quality, and audit committee effectiveness in substance versus in form. Contemporary Accounting Research, 33(3), 1199–1237.
Serrat, O. (2016). Knowledge solutions. New York, NY: Springer Berlin Heidelberg.