One of the most important financial decisions that you will ever make is planning for your retirement. You will likely have several different sources of income during your retirement; one of them will be your pension plan. Although most people these days don't have a pension plan through their employer almost everybody gets one from the government. It is important to know how this affects your retirement planning.
There was a time when almost everybody had a pension plan through their job; this really isn't the case anymore. These days the only pension that most people are likely to get will be the one that is offered by the government. The amount that this one pays will be far too small for you to actually live on so you are going to have to make sure that you have money available besides this for your retirement. If not you are going to find that it will be very difficult to afford to retire.
If you do have a pension plan you need to make sure that you understand how it affects your retirement planning. In general you will find that your government benefits will be reduced if you have a pension plan. In most cases the amount that you can contribute tax free to your retirement fund will also be reduced. It is important that you make sure that you know how you are affected by all of this so that you can get the most out of both your pension plan and any government programs that you are eligible for.
It is also important that you know how to get the most out of your pension plan. In most cases you will have quite a bit of flexibility on when you take it and the amount that you receive will be largely affected by this. You need to figure out at what point you will be able to get the maximum out of your pension plan while at the same time limiting the amount to which it affects your government benefits. This decision can get quite complicated since there are a lot of factors that need to be considered.
If you are like most people and you don't receive a pension plan you are going to have to make sure that you are able to save enough to make up for this. This is going to require quite a bit of savings since you can probably expect to be retired for a fairly long time. Fortunately there are programs in place to help you with this. The main ones are the tax free savings accounts. These are designed to make it easier for you to save for your retirement. Whether you have a pension plan or not retirement planning is critical so you will want to make sure that you talk to your financial planner about it.
Personal Finance Advice