Various Types Of Retirement Options

| Sunday, November 17, 2013
By George Dodson


In the 21st century, a lot of us choose employment in order to meet our basic needs. With years of employment, we become experienced in the job we are doing. With age, we realize we ought to save for our future when we can no longer work anymore. For us to be able to retire, we have to prepare a method of earning substantial income.

There are many methods of doing this. Some save their whole life so that they can live off their savings when they are no longer working. Other people have plans in place that pay them a certain sum of money periodically when they are no longer in employment. These are referred to as pension schemes.

What are the different kinds of pensions plans available?

Let us analyze the Designed Benefit Pension Plan. A fixed sum of money is paid periodically after retirement that is arrived at by using formula that helps determine your aggregate pension benefits.

Three separate formula are used to calculate your pension benefit. The first is the flat benefit formula; the second is the best earning average and the final is the career average earning formula.

Another pension scheme type is the Defined contribution pension plan that pays a standard amount from the persons salary into an investment account periodically. The sum of the amount in the account differs according to third party sources that add to it and the interest you receive on that amount.

Only the 2 aforementioned schemes are registered. Other pension schemes, for example deferred profit sharing and individual pension plans exist but the amount earned will vary with how well your company is doing.




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