Learning How to Make the Most of Pension Plans
Posted by ankitagore on December 8th, 2016
Larger organizations and government agencies are two of the only employers left that are really offering pension plans. You may have earned a pension plan from a previous employer, even if your current employer does not provide one. Basically these plans in the title you to a monthly benefit from the employer you work for each month after you retire. This is usually based off of a specific number of years that you perform a service for a specific company.
If you work for a specific company for 10 years, for example, you may receive 1.5% of your annual income that is put into an account each year for your retirement. If you work 20 years for specific company, you may receive 3% of your annual income each year that is put aside into an account. All of this money will be given to you upon your completion of a certain amount of years with the company.
In order to receive a pension plan from the government, you currently have to work very minimum of 25 years. This means you must be a full-time employee for those 25 years and never a part-time employee. This is the very reason that so many people are seeking employment with a government or state agency. It really is a win-win situation for everyone.
Pension plans are becoming more and more scarce because they are very costly for employers. If your average life expectancy continues to go up each year, this company will have to continue to send you money for every year you are alive. Therefore, the bottom line numbers do not work out in the company's favor when pension plans are offered. Also, many of the jobs offered in the United States are for smaller startup companies. These companies do not have any way of supplying a pension plan for you.
If you're fortunate enough to be working with a company that offers a pension plan, you probably should consider staying for as many years that are required to receive that plan. After you spend 20 or 30 years with the company, you will be awarded in return with a check each month. This may not seem like a lot of money right now, but in the following years to come you will be very thankful that your employer is basically giving you free money for the services you have provided for the company. Do your best to make the most of the knee available, scarce pension plans that are still offered.
Almost everyday we hear in the news about the deteriorating condition of our senior citizens. What is even more depressing is that most of these people who are now compelled to live an impoverished life were at one point of time quite well to do working individuals.
Then how did they all come to such a sorry state? The answer is quite simple; they did not save for a proper Retirement Pension Plan. The "have it, so spend it" policy that majority of us follow is in a way leading us to the same conclusion.
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