401k
2006-10-09 17:06:31 · 2 answers · asked by toby w 1 in Business & Finance ➔ Careers & Employment
Use the 401k or the ESOP? That is a difficult question.
The 401k gives you tax savings now and probably has a better diversified investment plan when compared to the ESOP. Although the investment choices in the 401k may not be the best.
Investing in the ESOP probably gives you a higher risk factor. You are using your employer for your current income, is it wise to also count on that employer for your retirement savings investments? And if your employer offers a retirement annuity, you would be depending on the employer quite a bit.
Consider the ESOP investments for your short term investments
2006-10-09 17:21:07 · answer #1 · answered by The Count 4 · 1⤊ 0⤋
there will be a disadvantage if it is traded off as a substitute to a salary raise or something.
Usually esop is a retention stratergy in which the vesting period is over 3-5 yrs. If you leave the company in the interim, the options will collapse.
The company also keeps the vesting ratio as 10 10 80 over 3 yrs...which ensures employees dont leave the company...its usually not worth too much unless the co. goes in for an IPO or is bought over by another company...till then its just paper.
2006-10-09 17:17:09 · answer #2 · answered by Arunima S 2 · 0⤊ 0⤋