Accessing the Corporate Retirement Plan

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Retirement is something that many people think about and dream off but fail to plan properly for.  There is little point in relying on any state based pension as this is unlikely to be enough to give you a good standard of living.  However, despite this, the retirement scheme is often overlooked when changing between employers.  There are two issues with this.  The first is that it is usually difficult to take any plan you have already been paying into, with you.  The second is what retirement scheme your new employer offers.

If you change jobs several ties you will find yourself with several small retirement schemes and no real retirement fund.  If you find that you are less prepared than you would like for your retirement then it is worth consulting Richard Brothers Financial Advisors to find out what options are available to you and how to make the most of the funds and schemes you already have in place.

The Corporate Retirement Plan

Despite the elaborate title, the corporate retirement plan literally refers to the pension scheme offered by a company.  There are a variety of different schemes available although you will be limited by the scheme your employer has chosen to put in place.  The idea behind the plan is to encourage employees to save for retirement by the company donating funds to the scheme; effectively boosting your pension savings and giving you money for nothing.  The figure which your employer will contribute is often a percentage of your salary although it can match your own donation; up to a limit.

Defined Benefit

Some firms and government bodies will offer a defined benefit plan.  These will, as their name suggests, provide you with a set amount of funds at the end of the scheme.  This may be a lump sum given to you at retirement or a set amount paid to you every month for the rest of your life.  There are benefits and disadvantages to both options.  It is also possible to access a defined contribution retirement saving plan in which you will know how much you and your employer are contributing but you will not know the exact payment you will receive at retirement; this will depend on how the investment grows and the market performs.

These are the schemes which gave rise to the final salary plans and time served plans; which calculate your reward based on the number of years you have been with the company.

Getting the Corporate Retirement Plan

Any plan offered by a corporation should be available to any of its employees.  You may need to pass a qualifying period such as three or six months before you are allowed to join.  You will probably be presented with the opportunity of whether to invest or not.  However, as the company is effectively providing you with additional funds at no extra cost you would be silly not to take it.  If nothing else it will also give you a start towards your ultimate retirement.

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