Personal
Finance
Whether one likes it or not
they must have some knowledge of personal finance and investments.
Previously many employers
offered retirement programs called pension plans, but those types of
plans are becoming rare. They are being replaced with 401(k)
programs, or a similar type of plan. The two major differences
between the plans is who makes the investment decisions and how the
benefits are received, as noted in the table below.
|
Plan
Type
|
Who
Makes Investment Decisions
|
How
benefits are received
|
|
Pension
Plan
|
Professional
management
|
Usually
a monthly check.
|
|
401(k)
403b, PSP,
457, Etc.
|
Individual
Employees
|
Individual
employees must manage the withdraws from a lump sum.
|
Pension plans are often
referred to as defined benefit programs since the benefit you will
receive is defined. Conversely, 401(k) plans are often called
defined contribution plans as the amount you contribute into the
plan is defined, not what you will receive. With 401(k) programs the
amount you’ll receive is contingent upon how you manage your
investments both in your working and retirement years. That is why
it is to your advantage to have some knowledge of investments.
Your retirement is in your
own hands. We hope we've encouraged you to educate yourself and take
charge of your financial future. Don't delay.
We
currently have the following topics and plan to add more so come
back soon.
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