Pensions… its simplest version pensions are retirement accounts that an employer maintains to give you a fixed payout when you retire.

If your company offers you a pension than you’re automatically enrolled in the plan, though in some instances you need to be on the job for a year before you are officially enrolled. Even though you are enrolled and the pension benefits are being credited to you, they aren’t 100% yours until you become fully vested; that can take five or more years.

As for the investment decisions: You have none. Your employer hires a firm to invest the pension plan’s assets. There is absolutely no work required (or allowed) on your part to manage the pension money.

Your payout typically depends on how long you worked for your employer and on your salary. When you retire, you can choose between a lump-sum payout or a monthly “annuity” payment.

Deciding between taking a monthly pension payment or taking a lump sum is really dependent on your individual goals.  This is where we at Botsford Financial Group can help.  Going through our defined process will help you analyze your options and determine which path is best for you.

Should you have any additional questions, please feel free to reach out.