Posted March 24, 2019 04:14:30The next big thing in the workplace is a retirement plan, and as a result, the media and the rest of us have been inundated with the word.
As with any new thing, the press is quick to write it off, saying “it’s not a retirement issue”.
The truth is it is, but the way we think about it has changed.
What are retirement plans?
For those who work full time and have been with the same employer for more than a decade, we all have them.
They provide a way to put aside money for a rainy day, or to save for retirement.
Some are for longer periods of time.
For example, a pension plan allows you to withdraw money in increments of a few years, or until you reach the age of 55.
Some of these plans are simple to set up, and provide all the benefits that you might expect.
Others are more complex.
Many offer the prospect of a higher income after a certain age.
What is a pension?
It’s a money you can give to someone when you die.
It’s the equivalent of a 401(k) or similar plan.
In retirement, most pension plans offer a lump sum payment that is guaranteed to grow each year, or the maximum amount that can be withdrawn from your pension plan each year.
Why do they matter?
If you are working full time, it can be hard to make ends meet, and if you want to take some extra income, a pensions plan may help.
But if you’re just starting out, or retiring after a short period of employment, a retirement pension is likely to be a last resort.
What do you need to know about retirement plans in the digital age?
Read moreHow to tell if you need a pension and what you need when you need oneThe idea that you should be saving for retirement is still very much alive in the news.
But there are two main reasons to consider a retirement retirement pension.
First, some people find it hard to put away money for retirement when they are on the payroll.
In a world where most jobs offer flexible working hours and benefits, it is not a stretch to imagine people who don’t want to work long hours finding it hard getting around.
But for many others, the pressure to keep working has become too great, and they simply cannot afford to pay the monthly cost of living increases that come with retirement.
Second, many people are struggling to save enough money to get by, and are not aware that they need to.
They may have been told by their employer that they could just keep going on and on and keep getting paid, but they may not realise that it’s the wrong way to look at it.
The key to saving money is to understand what you can afford, and what the income that you can realistically expect to receive each year is.
What do we need to worry about when thinking about a retirement account?
You need to be aware that the income you can expect each year from a retirement savings account may be lower than what you might normally expect.
That’s because the rules governing your retirement savings plan vary from one industry to the other.
For instance, a 401K, or defined contribution plan, is designed to provide a lump-sum payment to the individual over their lifetime, rather than a monthly payment.
In contrast, a traditional IRA is an income-producing, but not guaranteed, investment, that is invested over the course of a life.
This means that the money you have in the retirement account is more likely to grow, and you may have a better chance of getting a bigger payout than you would from an IRA.
For many people, however, the difference between a traditional retirement plan and a 401k is that the amount that they can expect is lower than the money they actually earn each year; the amount you actually earn from a traditional pension plan is higher than the amount they can earn from an annuity.
You need not be worried about paying your bills on time, or getting a pension when you retire.
If your employer has agreed to provide an annuities payment, the payment should be made automatically when you reach age 70.
A pension can be a way for you to help pay your bills.
If you’re an individual who is working full-time, a good retirement plan can also help you reduce your reliance on public assistance payments.
Can I get a retirement annuity?
If you want a pension, you should also consider getting a retirement guarantee.
An annuity is an annual payment made to an individual for the purpose of securing a certain income, typically for a set period of time, for the duration of the annuity or a defined benefit pension.
The guaranteed income will depend on the length of the period you are contributing, the length the individual is working and whether you are receiving a pension.
An annuity can be used to