Pension Explained in 60 seconds

Показать описание

If that was too fast read this:

A pension plan is a type of retirement account where the employer maintains the funds on the employees behalf for retirement. Usually these types of funds are tax-deferred, which means you will have to pay taxes once you get paid out.

There are two types of retirement pension plans.

The first one being defined benefit plans. This plan is more of a traditional and older style of a pension plan.This is what most people think of when they say pension. There's usually some sort of calculation that factors in, years of service and salary that will equal the amount that they will pay out once you retire forever.

The second being defined contribution plans. You probably know this as a 401k. With this type of plan you can control where your money is being invested and how much you want to put in.

With a traditional pension you can either have a monthly payment or a lump sum. In some cases you can do both.

Usually the pension is paid to you. But there are cases where they have joint and survivor payments. Which pays your surviving spouse until they pass away.

It is possible for traditional pension plans to run out of money. And many times they are a fixed rate, which means your payments may not keep up with inflation. So the other option is to take a lump sum to avoid your pension plan from going broke or bankrupt

===================================================

================== VIDEO SETUP ================

DISCLAIMER: This video and description contain affiliate links, which means that if you click on one of the product links, I’ll receive a small commission. This helps support the channel and allows us to continue to make videos like this. Thank you for your support!

DISCLAIMER:
This video is for entertainment purposes only. I am not a legal or financial expert or have any authority to give legal or financial advice. While all the information in this video is believed to be accurate at the time of its recording, realize this channel and its author makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this video.