Planning your retirement early on in your life is actually a good habit to get into. It is after all an important milestone in people’s lives. You should begin considering all of your options where you are going to be staying in your senior years; are you going to stay in a nursing home located in Chicago where caregiver services are being provided or perhaps somewhere else?
Moreover, you have to learn and research about the different retirement plans and benefits available to you. There may be several articles online that you can read about if you want to talk about the common ones that can be perfect for you, but this article will be discussing the unusual kind to give you an idea about them.
Public Governmental Employees Retirement Plan
This pension plan is formally known as the 414(h) plan; only government and public employees can utilize it. This is actually a special kind of money purchase retirement plan that can make contributions to both the employee and their employer. Basically, it can grow from tax-deferred investments until the time you finally retire.
The 414(h) plan is perfect to consider because vesting is oftentimes immediate. Plus, you can request for it to be transferred from employer to employer if you ever plan on switching jobs, for as long as your new place of employment allows it.
Top-hat plans or Supplemental Executive Retirement Plans (SERPs) as others would like to call it, are funded solely by the employer. They are actually a form of a nonqualified and deferred compensation arrangement which have been designed to be given to highly compensated employees.
The benefits included for this plan are most of the time funded with a cash-value life insurance as well as grow the tax deferred until they have been paid out to the employee.
Voluntary Employee Beneficiary Associations (VEBAs)
This pension plan has been closely associated with the individual welfare benefit especially in terms of its segregation of assets and tax treatment. It also refers to the rules when it comes to the distributions and contributions from the plan.
VEBAs is a good retirement plan for you if you want a collective version of a welfare plan that would allow various employers to combine all their benefits and accounts into a solitary entity; but you must meet a specific set of criteria before qualifying for one.
Welfare Benefit Plan
The Welfare Benefit Plan or the 419(e) Plan allows employers to choose the insurance benefits they would be providing to their employees. This plan essentially works like a funding vehicle for all the insurance benefits the workers will be getting as soon as they retire.
This pension plan can offer a number of different benefits like dental, health, supplemental disability, life, and other Medicare supplemental coverage. All the employers that provide this plan would have to follow all the regulations that can be found in the Internal Revenue Service (IRS).
Remember these are only some of the plans that can be available to you. Plan your retirement early so that you will not have to worry about it when you reach your senior years.
About the author:
Jeric is a freelance writer that features food, lifestyle, travel, DIY subjects, and nature. He is an adventurer, taking on the world and everything it has to offer, may it be the good and the bad. He also has a weird love for reggae and sharks. See: Reggae Shark