- Ask Me
- My Money Plan
- Banking Right
- Buying A Home
- Buying Cars
- Credit Cards
- Financial Advisors?
- Insurance
- Investing Right
- Loans Done Right
- Money Scams
- Paying For College
- Paying Off Debt
- Refinancing
- Retirement
- Salaries
- Social Security
- Taxes Done Right
- Your Money

Your Sixties: Worry- Free With Retirement Pension Plans

After working hard during your youthful years, what's next? All the hard work during your twenties up to late fifties should be well paid- off. And when you turn sixty, retirement comes to the scene. A retiree may wonder, 'What's in store for me?'. These things can be taken care of and given attention even before retirement.

Retirement pension plans provide the elders with income after retirement, and it certainly helps a lot for old people who can't work for themselves anymore because of ailments that are brought by age. These retirement pension plans can either be arranged by an employer, or the person himself.

Taxes charged by the government for retirement pension plans are deferred, and can be used for other forms of investment.

Employer- processed retirement pension plans comes as defined benefit plan or defined contribution plan upon working with a company. The defined benefit plans are arranged between the employee and the employer, and is being paid by the employer based on a formula of how long the employee has served the company. On the other hand, defined contribution plans are being paid by the employer annually, and are put into the pension plan of the employee. The amount may then be taken in one lump sum or in the form of monthly benefits for years.

Retirement pension plans can be terminated, and must be reviewed by the Pension Benefit Guarantee Corporation. The Employee Retirement Income Security Act (ERISA) of 1974 grants that employees that are under a retirement pension plan are entitled to know about the benefits they have with the pension plan. Employees should be given a copy of their plan within 90 days of enrolment, accounting of the total benefits, notifications about the vesting schedule, notices of changes made regarding the plan, in which updates should be furnished every half a decade, and finally, if the employee leaves the company, a final statement of account.

On the other hand, retirement pension plans that are being processed by the individual himself are being granted some favourable advantages, too. The amounts that individuals set aside have taxes waived up to the point that they retire. Contributions are up to two thousand dollars or two thousand and five hundred dollars for individuals with a non- working spouse, and had been raised by a thousand in 2002. These amounts are being put into individual retirement accounts. 401k plans allow an employee to contribute from his pay check before the taxes are taken out. The contributions normally go into a 401k account, with the employee having the liberty of choosing the investments.

Under the provisions of ERISA, any employee over 21 or who has worked for a year should have a retirement pension plan. Pension programs are now being formulated for funding as well, and under- funding has penalties.

It's never too early to save up for the time that you can't work anymore. Saving up for that time won't necessarily have to hurt your pocket at this time, since the government has many easy options for retirement pension plans. Whatever one does today affects the future, and a retirement pension plan is necessary to assure a worry- free journey to old age.