The real problem that one faces is after retirement. The financial problem and instability breaks him/her and the prospect of begging others for monetary support does not seem appealing. The pride with which you have lived your whole life shatters in one second after you grows old. However, no more begging, you have always walked with your chin high and will continue to do so even after retirement just by buying pension policy.

The pension is a kind of insurance that provides you monthly income after you are retired so that you can support your family even when you are without a job. If we talk about pension plans, then they are of two types- money purchase plan and defined benefit plan. Some even combined both the plans, which is referred as combination plan.

1.Benefit Pension Plans- This type of pension plan is intended to offer you fixed money after your retirement. Once you leave your job, your pension scheme activates and you receive the pension depending on years of your services and on the money you paid every year.

2.Money Purchased Plans- Also referred as defined contribution plan. In this a certain sum is usually kept in your investment account with your name, It often adds fixed amount for you. As soon as you retire, these savings in addition to interest is utilized to purchase your pension policy. Though, you are completely clueless about the pension amount until you retire.

Usually, some plans of this kind offer workers a choice to decide their own investment, however few investments are decided by the board of trustees or higher authority. Therefore, the amount of pension actually relies on your achievements and contributions.

The above pension plans comes under registered pension plans, however, along with these, there are also unregistered plans such as Individual Pension Plan, Deferred Profit Sharing Plan, Employee Stock Purchase Plan. These do not follow any particular rule and the amount of your pension is determined via your performance in the organization.

Let us talk about Individual Pension Plan that it is usually crafted for people with handsome income. In Deferred profit sharing plan, the employers create a retirement account for their employees in fact, even company offers its profit share in this account. The last one that is in the Employee Stock Purchase Plan, the employee is allowed to purchase the shares of the company at a cheap price.

Now that you know a bit about the pension plan, lets talk about few terms related to the pension plan

€Immediate Annuity- A huge amount of money is deposited at once and then a certain amount is paid at regular period.

€Deferred Annuity- It is the best pension plan for young people where you can re-invest your amount, bonuses and interest at the end of term in order to receive fixed payment after retirement.

€Fixed Annuity- Ir provides a certain amount for a certain period of time

€Life Annuity- It provides a certain amount of money on a monthly basis. By any chance, if the owner of policy died before maturity, then nominee mentioned will be given the entitled money after the due date.

€Guaranteed Period Annuity- This type of policy also provides a fixed amount, however, if the policy owner died the nominee will be given only remaining amount.

Purchasing pension policy is actually a kind of investment. So before its too late, contact your financial consultant and discuss with him your future plan, decide exactly when you have planned to retire and design your pension plan accordingly.

When you reach your 60, your healthy body, usually easily gets fatigued, but life has to go on and after working so hard whole your life, you definitely deserve a comfortable life and money is one of the important factor for comfortable livelihood.

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