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Starting The Golden Years Early:Early Retirement Pension

In order for an individual to take an early retirement, it is important that sufficient retirements funds are available. These funds will be used to support the lifestyle of the retiree as well as meet the ongoing expenses.

Sufficient Funds

To ensure that sufficient funds are available, there are a number of options available to the individual who is considering early retirement. Some of those early retirement options include individual retirement accounts and early retirement pension funds.

Tapping Into Individual Retirement Accounts

When considering the option of early retirement it is important that the individual have sufficient retirement funds to make sure that they are able to maintain their quality of life. That quality of life can be defined as the individual’s ability to pay their monthly bills, cover medical insurance costs, and have money to fulfill retirement dreams and sufficient money to keep ahead of inflation.

Number Of Revenue

Therefore it is important to have a number of revenue sources that are earmarked for retirement. Some of those retirement accounts could include a Roth IRA, traditional IRA and 401(k) plan.

Incurring Any Penalties

Additionally, it is critical to know that most retirement financial accounts cannot be accessed until the individual reaches a certain age. Generally, the age that an individual can access these accounts without incurring any penalties is at the age of 59 ½ years of age.

What Is A Pension Plan?

Retirement pension funds are those pools of money that are set up by employers to provide income for their dedicated employees upon their retirement. Generally, these pools of money are created by the company or corporation in an effort to provide monthly income for the employee upon their retirement.

Pool Of Money Grows

Often this pool of money grows as the company budgets a certain amount of their revenue into the pension fund. Furthermore, this amount paid into the pension fund is usually a percentage of the payroll expense for their employees. In addition, this money is invested to help with its growth.

Pension Fund

A pension fund is important for the company because it is a benefit that is provided to the employee. In turn this benefit helps to attract quality workers and motivate their continual service in order to receive this money upon their retirement. For the employee, this benefit is important because upon their retirement they will be able to use their pension to help supplement their retirement income.

Using Early Retirement Pension Funds

Additionally, for a number of reasons, both the employer and employee may opt to consider the disbursement of early retirement pension funds. The advantage to the employer is that the disbursement of early retirement pension funds helps to reduce their liability and strain on future payouts to employees. This is because the disbursement of early retirement pension money is less than if the employee waited till they had reached full retirement age.

Early Retirement Pension Fund Disbursement

Additionally, an early retirement pension fund disbursement to the employee may be an advantage as they can retire from the company, draw down early retirement pension money and still continue to work elsewhere. Although their pension amount is less they can start a second career or get a part-time job or if they have sufficient financial resources they can just simply retire.

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