Employee Stock Plans with Your Employer

If you’re not certain about how to get involved with the stock market, then consult with your employer as there are usually options available through the company. When you begin looking at employee plan services, there are a few mistakes that you want to avoid making so that you choose the best plan possible that will result in the best returns. One mistake that you want to avoid making right away is buying when the rates are high. You want to sell high and buy low so that you’re not losing money in the process.

A benefit of employee plan services is that you can purchase stock in the company at a reduced rate compared to what others would pay. This is beneficial for when the stock is at a lower rate. You can use your paycheck to purchase stock in the company. Most companies allow you to spend about 15 percent of your check so that you don’t spend everything that you make. There are usually annual maximums that you need to abide by as well.

It’s usually a bit easier to purchase stock plans through your employer as the business can handle all of the details instead of you worrying about whether the money has been paid into the stock. However, you should keep an eye on the overall rates as you’re going to need to make a decision as to whether you should buy more or sell what you have. Find out about tax payments as the taxes that you owe on the stock are usually deferred until the stock is sold and you have the money in hand. A benefit of an employee plan is that you can get out of it at any time you want instead of waiting until a certain time has passed or until the stock reaches a certain point.

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    Author: Ally Allshouse

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