pension plan
A pension plan is a retirement plan that requires an employer to make contributions into a pool of funds set aside for a worker's future benefit. The pool of funds is invested on the employee's behalf, and the earnings on the investments generate income to the worker upon retirement.
pension fund
A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides retirement income.
My opinion in which is better monthly pension or lump sum
As to which is better: it depends.
First we should analyze Advantages & disadvantages of the “Lump Sum & monthly Pension”
A lump allows the employee to take control of the investment options for that lump sum. The individual will be able to make decisions on how to invest that money or hire a financial advisor or investment manager to assist with the process. The employee will also have full control of and access to any or all of the money in the account as needed, unlike the lifetime income payment where they only receive a set payment each month. Further, if the individual dies, his or her spouse, children, or other heirs will have access to any money left in the account. The individual will pay taxes on the money
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This can usually be payable over the life of the individual, for a specific number of years, or until the second to die of a married couple. The investment risk is borne by the company or by an insurance contract, so payments to the individual are guaranteed and backed to some extent by the Pension Benefit Guaranty Corporation. If the individual has chosen to take the payments over his or her own lifetime and dies before the spouse, the spouse will not continue receiving any payments. A joint life payment must be chosen in order to avoid this. Like the lump sum rollover, payments are taxable as ordinary income only when they are
Once salaries and overhead are paid, the members of an LLC can determine a method of sharing profits that makes sense for their membership based on seniority or a member’s investment. If a company does not have a defined profit sharing formula, the profit is then shared according to each member's ownership percentage. Profit distributions are not salary. Salary paid to members/employees gets taken out of revenue prior to determining the amount of profit available to
Fee-For-Service or Traditional Indemnity plans are uncommon but still used. Payment is rendered for services provided. Traditional Indemnity plans in general have no provider network and a patient can see a specialist without a referral. If a patient uses an FFS plan, the patient would pay the provider for medical care provided. If the medical care provided is covered by the plan. The insurance company would then reimburse the patient according to the guidelines stated in the policy or the UCR’s “Usual, Customary, and Reasonable Fees.” (“Private-Fee-For-Service Plans,” CMS.gov, 3/16/2012). Key benefits of a Traditional Indemnity or Fee-for-Service plan include no in network physicians or health care providers and the patient may see any physician or seek health care services at any healthcare facility. The patient or client can also seek treatment from a specialist without a physician referral. Fee-for-Service plans are the most flexible plans for choosing a healthcare provider and health care facility. However, Traditional
The plan setup is how the plan will actually be administered. It gives the responsibilities of the parties involved. For example, if the administration process is outsourced to a third party administrator, the process in which the plan will be managed is defined. The plan design also includes specifics, such as who handles claims' discrepancies and other issues that the employer may need to address.
A traditional Individual Retirement Account (IRA) “is a way to save for retirement that gives you a tax advantage…” (www.irs.gov, 2016). It is a retirement account [401(k)] that an investor is able to make contributions to, similar to a savings and checking account. Once money is added into the IRA, an individual can invest the funds into different investment vehicles; such as: stocks, bonds, mutual funds, etc. With regards to tax advantages, the individual who opened the account will
...t capable of loaning funds from their accounts. In addition to this, there are limited selections pertaining to this investment option. The participant that is contributed by a participant should not exceed $11,500 dollars as well. The entire system is not complicated which makes it ideal for everyone. It is even considered one of the best features it possesses. Yet, the liabilities are usually shared by both parties. With this option, both the employer and employee could enjoy the same perks and benefits.
Value: Trust and Transparency Retirement plans are an intricate part of a strong company. They are one of the greatest benefits to employees. Retirement plans provide a financial security towards the employee’s well being in a long-term sense. However, today there are a lot of problems regarding retirement plans were companies are often trying to avoid providing maximum benefits to their employees.
Social Security is a major social program that provides benefits to multiple groups of people within the United States. These benefits include payments for pensions, disability, and unemployment compensation just to name a few. The majority of social security beneficiaries are retired workers and the remaining are pension recipients, disabled workers, dependent spouses, and children of retired or deceased workers respectively (Hyman, 2011). Social Security is financed through a taxpayer payroll tax, in addition to an employer’s portion that is matched and paid directly to the government on a quarterly basis. The employer portion of Social Security is usually not transparent to employees, but is a requirement for companies by law. In addition, self-employed individuals are also required by law to pay their own portions of OASDI and Medicare. Overall, the eligibility requirements for Social Security benefits are based on paying a tax through a place of employment and can be collected once workers have reached their assigned retirement age or become disabled. The employee and employer contribution rate is 6.2% (7.65% include FICA), up to the maximum wage base of $113,700.
There are extensive studies on retirement covering education in general. The findings suggest that education is an important factor in affecting retirement planning preparedness (Hogarth, 1985; Joo&Pauwels, 2002). Education enables individuals to explore more information relating to their retirement planning and that sources of information will influence their decisions, attitude and intention to do retirement planning (Hogarth, 1985; Joo&Pauwels, 2002). Also, DeVaney (1995) addressed that the effect of education level may serve as a motivator or guidance for individuals to start the preparation for retirement planning. With the increase in age and educational level, individual tends to be more motivated to work on retirement planning preparation or take some action for their retirement (DeVaney, 1995).
Plans are generally separated into two categories; defined benefit plans and defined contribution plans. Defined benefit plans include pensions. This type of plan guarantees a given amount of monthly income, less portability, and shifts the investment risk to the employer. Defined contribution plans such as a 401(k) allows the individual to choose investments. This puts the risk on the employee and does not guarantee any minimum or maximum benefits. 401(k)s are also very portable and vesting is almost immediate. 401(k)s have gained in popularity and most companies are switching to 401(k)s from a pension plan. A new plan has emerged which is being seen as the ideal retirement plan. This new type of plan is a hybrid of the two and offers the best features from each of the plans and is called a cash balance pension plan. Those who are not offered any type of retirement plan can get IRA’s which are available to everyone.
Also, if one of the owners is sued the funds may end up with a judgement lien on them and, depending on the outcome, may result in most or all of the funds being depleted. Another problems arises if the owner has three children, but only lists one child as the joint owner. This automatically causes the other two children to be disinherited from the account. Another issue arises when one of the beneficiaries is a minor. A conservatorship is put in place in order for the account to be used for the minors
conditions. During this leave the employee's benefits, position, health benefits and pay are protected as
Deciding how important decisions are made is crucial in any business structure, but even more so when there is more than one owner. Therefore, the partnership agreement mandates how the owners will make decisions by either unanimous vote or by majority vote. Capital contributions include funds provided by the partners to be utilized in the business. The partnership agreement dictates how much each partner will contribute to the business as well as plan for future financial obligations. Salaries and distributions are often classified as partner withdrawals and profit/loss allocation. The partnership agreement establishes when money is available for withdrawal and how much of the profits and losses are allocated based on capital contributions. All business entities should be prepared for worst-case scenarios involving death, disability, and dissolution. Deaths and disabilities are untimely, so the partnership agreement outlines who inherits the partnership’s assets through trusts and wills. Dissolution is never a pleasant topic to think about in the beginning, but it is essential nonetheless. The section inclusion in the partnership agreement enables the partners to be prepared in the event that a dissolution does occur (Neville
A personal financial plan is essentially important for any person and their loved ones to minimize future hardships and difficult financial situations. Short and long-term financial freedom and stability is something an individual wants to have through to the end of his or her life. Financially planning for one’s retirement years is vital so a person does not sustain major unhappiness or unnecessary pain in what is supposed to be the reward for working so hard in their younger years.
... IRA. The retirement account is rolled over to an allocated gold account. This is a wise move to secure retirement earnings because the funds cannot be touched by employers in case the investor decides to leave his or her job.
Retirement planning is a way to insure that you will have enough income to live comfortably when you retire. Most people will be retired 25 years or more, and careful planning is the key to successful retirement. Why would you want to have bill pressures and mortgages when all you really want to do is relax, or follow that dream of traveling the country in an RV?