- Can a Child Collect the Pension of a Deceased Parent?
When a parent passes away, one of the biggest financial questions families face is whether their children can receive any of their parent’s pension benefits. Unlike life insurance or retirement accounts, pensions have stricter rules that often limit who can inherit them, and children are rarely at the top of the list. Still, there are… read more…
- Annuity vs. Roth IRA: Pros and Cons for Retirement Income
When planning for retirement, one of the biggest decisions you’ll face is how to generate consistent, tax-efficient income. Two common options, annuities and Roth IRAs, serve very different purposes, but can both play a key role in your strategy. A Roth IRA offers tax-free growth and withdrawals in retirement, while an annuity can provide guaranteed… read more…
- Do Pensions Run Out of Money? Rules and Risks
For generations, pensions have been regarded as the gold standard of retirement security, offering guaranteed income you can count on for life. However, funding gaps, longer life expectancies and economic volatility have put pressure on many pension plans. It begs the question: do pensions run out of money? Understanding the rules, risks and options for… read more…
- Pension vs. 403(b): Pros and Cons for Each
Pensions and 403(b) plans represent two distinct ways to save for retirement, each with its own structure and advantages. A pension provides a predictable income stream in retirement, usually funded and managed by an employer. A 403(b), on the other hand, relies on employee contributions and investment growth, giving individuals more control but also more… read more…
- 403(b) vs. Pension: Retirement Plan Comparison
A 403(b) plan is common in public schools, nonprofits and religious groups. It is a defined contribution plan where employees add money to a pre-tax or Roth account. The money is usually invested in mutual funds or annuities. Growth depends on contributions, investment performance, fees and time. Some employers may contribute, but matching is not… read more…
- Can I Withdraw From My 457 While Still Employed?
Planning for retirement often comes with questions about when and how you can tap into your savings. One such question many people ask is, “Can I withdraw from my 457 while still employed?” Unlike other retirement accounts, 457 plans (also known as 457(b) plans) have their specific rules and exceptions that can make them both… read more…
- How to Collect a Pension From a Former Employer
Many people leave behind pension benefits when they change jobs, and claiming them later can feel complicated. Fortunately, with the right information and preparation, collecting your pension is usually straightforward. The process involves confirming your eligibility, tracking down your plan if it has changed hands and selecting the best payout option for your needs. Knowing… read more…
- Is Your Pension Considered Earned Income? Tax Planning Rules
When it comes to tax planning rules, many retirees often ask one question in particular: is a pension considered earned income? The short answer is no—pension income is generally not classified as earned income for tax purposes. Unlike wages, salaries, tips and self-employment earnings, which qualify as earned income, pensions fall into the category of… read more…
- How Much Should You Put in Your 403(b) Per Paycheck?
If you work in the education, healthcare or nonprofit sector, you’ve likely asked an important question regarding your plan for retirement: how much should I put in my 403(b) per paycheck? The right amount to contribute depends on several factors, including your age, salary, employer match and overall retirement strategy. Whether you are just starting… read more…
- SEP vs. Annuity: Which Is Better for the Self-Employed?
If you’re self-employed, saving for retirement is your responsibility. Two common tools are SEP IRAs and annuities, but they work in different ways. An SEP IRA gives you tax advantages, control over investments and flexibility. An annuity offers guaranteed income, but usually with less access to your money and slower growth. Understanding the differences can… read more…
- What Are the Pros and Cons of a Defined Benefit Plan?
Defined benefit plans, often referred to as traditional pensions, offer a reliable stream of income in retirement. These plans can provide peace of mind with guaranteed income, but they also tend to be less flexible than defined contribution plans like 401(k)s. They are also not available to most private-sector workers. Whether you’re evaluating a job… read more…
- Guide to Rabbi Trusts: What They Are, Pros and Cons
A rabbi trust is a type of irrevocable trust that employers use to fund deferred compensation plans for key employees or executives. The money is set aside for the employee but can still be taken by creditors if the employer goes bankrupt. A financial advisor can help you decide if a rabbi trust is a… read more…
- Should I Take a $115,000 Lump Sum or Opt for $820 Monthly Annuity Payments?
If you are facing the choice between a large lump sum or monthly payments, you’ll likely want to consider several key factors before making a decision. One concern is when you will receive the money, since getting $115,000 up front will allow you to invest it sooner and earn money from it over a longer… read more…
- Is a Thrift Savings Plan (TSP) a Qualified Retirement Plan?
A thrift savings plan (TSP) is a retirement savings program specifically designed for federal employees and members of the military. TSPs are considered qualified retirement plans, and this status affects aspects like tax benefits, employer contributions and protections under federal law. Qualified retirement plans must meet certain standards set by the IRS and are typically… read more…
- Typical Options for Pension Payout and How to Choose One
If you participate in a pension plan through your workplace, you’ll have to decide how you want to receive the payout when you retire. Pension plans typically offer two disbursement options: an annuity, which provides steady payments over time, or a lump-sum payment. Each option has its pros and cons, and the best choice will… read more…
- Should I Take a $500,000 Lump Sum or $3,500 Monthly Payments for My Pension?
Deciding between a $500,000 lump sum or $3,500 monthly annuity payments for your pension isn’t straightforward and involves weighing several personal factors. You need to consider how long you might live, which impacts how much total money you’ll get from monthly payments, alongside your retirement age to see how long your funds need to last.… read more…
- How Deferred Compensation Works in South Carolina
South Carolina offers a deferred compensation program that allows public-sector employees to set aside a portion of their income to be paid out at a later date, typically during retirement. Contributions are often made pre-tax, which can lower current taxable income and provide potential tax benefits. Teachers, government workers, and other public employees can use… read more…
- What Is the Retirement Age in Ohio?
In Ohio, the retirement age follows federal guidelines, typically ranging from 65 to 67 based on the year of birth for non-government employees. Teachers and state workers may have different retirement age requirements due to their specific pension plans. A financial advisor can help you with your retirement plan options and create a personalized strategy… read more…
- How a Deferred Compensation Plan Works in Missouri
A deferred compensation plan allows eligible employees to set aside part of their salary into an account that grows tax-free until retirement. Many public employees in Missouri can use these plans, often called 457(b) plans, to supplement pensions or Social Security. A financial advisor can help you answer questions about Missouri’s deferred compensation plan, and… read more…
- What Is the Retirement Age in New York?
In the Empire State, the retirement age can vary depending on several factors, including the type of employment and the retirement system one is part of. For most individuals, the standard retirement age aligns with the federal guidelines set by the Social Security Administration, which is gradually increasing to 67 for those born in 1960… read more…
- What Is the Retirement Age in Illinois?
Public employees in Illinois are part of a structured retirement system that determines when they can start receiving pension benefits. The state offers several pension systems, including those for teachers, state employees and police officers, each with its own eligibility requirements. For example, members of the Illinois Teachers’ Retirement System (TRS) and State Employees’ Retirement… read more…
- What Is the Retirement Age in Florida?
The retirement age in Florida, specifically for those enrolled in the Florida Retirement System (FRS) for public-sector workers, depends on the employee’s age and years of service. Early retirement is possible, but it comes with a reduction in benefits. For most members of the FRS Pension Plan, the normal retirement age is 62 or 65,… read more…
- How a 409a Deferred Compensation Plan Works
A 409a deferred compensation plan is a non-qualified arrangement that allows employees to defer a portion of their income to a future date. This plan is often used by high-income earners to reduce taxable income in the short term. Unlike qualified plans such as 401(k)s, 409a plans have flexible contribution limits and payout schedules but… read more…
- How to Avoid Paying Taxes on Pensions
Retirement should be a time of financial peace, yet many retirees find themselves surprised by the tax implications of their pension income. Understanding how to legally minimize taxes on your pension can significantly impact your retirement lifestyle and financial security. While pensions are typically taxable, several legitimate strategies may help reduce your tax burden without… read more…
- 7 Jobs That Still Offer a Pension for Retirement
While pensions have become less common in the private sector, there are still jobs that provide this valuable benefit. Government, public-sector and unionized employers are all likely to offer pensions to their employees. It can be worthwhile to consider whether working in one of those fields could be a viable way to provide for a… read more…