Pension Plans: Benefits, Contributions, and Pitfalls

Although retirement can be one of the most anticipated times of your life, if unprepared it can turn into the most dreaded. If you have a well funded pension and a comprehensive retirement plan, then you should be looking forward to your golden years. If your pension is a little thin, and you haven’t been saving, then retirement can be a bleak prospect. Educate yourself about your pension, and consider hiring a personal finance expert like HelloWallet to help you plan for retirement.

• Plan For Retirement
• Increase Savings
• Build Wealth
• Manage Your Money
• Achieve Financial Security

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There are two broad categories of pensions: fixed benefit and fixed contribution. Fixed contribution pensions are by far the most common. This is because employers agree to make a fixed payment to your pension fund and they know their exact liability. Furthermore a fixed payment will likely result in the employer paying less over time due to inflation.

Fixed benefit plans are pensions where the employer has agreed to ensure that the pensioner gets a fixed level of benefits after retiring. Given the unpredictability of costs (and their tendency to rise) most employers shy away from these plans because of the potential for pension costs to mushroom as people retire. Think General Motors.

No matter what kind of pension plan your employer provides (or doesn’t provide), a comfortable retirement requires professional planning, and that means a financial guidance provider like HelloWallet.

HelloWallet securely downloads your financial data so you can get a complete picture of your finances in a few clicks. We also help you set up unique savings goals and advise you on how to optimize your finances to achieve them.

HelloWallet helps you calculate a suitable retirement nest-egg target then incorporates both saving goals and better bank products to help you maximize your net-worth by the time you retire. Most pension plans don’t completely cover your cost of retirement, let HelloWallet help you make up the difference. Sign up for two free months of financial guidance.