The Group Retirement Account (or “GRA”) and the Group Supplemental Retirement Account (or “GSRA”) resemble the Retirement Annuity account and the Supplemental Retirement Annuity account in many respects. There are, however, some fundamental differences between the group accounts and their nongroup counterparts.
Both the RA and the Group Retirement Account are contracts with TIAA-CREF. (more…)
A defined benefit plan is the granddaddy of retirement plans. Unfortunately, in the years to come, these plans will likely become the retirement equivalent of a dinosaur. In a defined benefit plan, as noted earlier, an employee’s years of loyal service are rewarded with the continuation of income post retirement based on a predetermined formula defined by the company. These formulas vary from company to company, so if you’re covered by a defined benefit plan, be certain to ask your human resources department to provide you with the information you need to review your benefits. (more…)
Because in a defined benefit plan, the benefit relates directly to the number of years you work for a company, the longer you work there, the greater the benefit during retirement.
The cost of early retirement on your pension throughout the rest of your life is something to consider as you make a decision about when to retire. (more…)
The lower age boundary defining “older worker” seems to depend on the context. Much of the retirement literature uses age 65 and older to define this category, a choice that reflects the salience of age 65 in previously enforced policies of mandatory retirement and entitlement for full Social Security benefits, as well as the general usage of the 18-to-64 age range in defining the “prime age” workforce. Within this context, “older worker” referred to someone whose continued attachment to the labor force ran counter to the normative pattern of retirement; by working beyond the “normal” retirement age of 65, these workers were considered categorically different from those who eschewed the option of “early” retirement. (more…)
If we look at defined benefit plans, it has a slumped down popularity among business owner in recent years. It is more like traditional pension plans where the plans are altogether financed by the employer. Annual contributions founded on actuarial computations involving employer’s years of service and salary are set aside for employees. (more…)
The thought of retire early may be an illusion for some and a punishment for others. Everything is, as the saying goes, depending on how you look at it. First, is it the decision whether retirement is voluntary or forced? Often when companies offer their employee early retirement is not really such an offer since the other option is to be fired. (more…)
Another old adage says that we should learn from the mistakes of others. When it comes to retirement planning, there are many legal, tax, and retirement saving mistakes you can make as a business owner, retirement plan trustee, or plan participant. (more…)
Retirement plans come in all shapes and sizes, but most plans fall into a few broad types. The following is a list of the major categories. I discuss the individual plans in detail later in the book.
A defined benefit plan is a retirement arrangement in which your employer guarantees the benefit. (more…)
A 401k plan is a retirement account set up by an employer into which employee put aside some of his/her salary into the account. It is named defined contribution plan because the annual amount of money that can be given to each employee account is defined. This 401k plan program does not assure a defined retirement benefit when employees withdraw their money when it is mature. (more…)
You are eligible for your employer’s pension plan if you have worked there for one year and at least 1000 hours. Employers offer two basic types of retirement accounts—defined contribution plans or defined benefit plans.
Defined contribution plans are characterized by an annual contribution being made for each employee. (more…)