Pension
Financial term in the Retirement category
Definition
A retirement plan funded by an employer that provides regular payments to employees after retirement. Increasingly rare in private sector, more common in government jobs.
Related Terms
401(k)
A tax-advantaged retirement savings plan offered by employers that allows employees to contribute a portion of their salary before taxes. Many employers offer matching contributions up to a certain percentage.
Annuity
A financial product that provides a guaranteed income stream, typically used for retirement. You pay a lump sum or series of payments, and receive regular payments for a specified period or for life.
Frequently Asked Questions
What is Pension?
A retirement plan funded by an employer that provides regular payments to employees after retirement. Increasingly rare in private sector, more common in government jobs.
Why is Pension important in personal finance?
Pension is an important retirement concept that helps individuals make better financial decisions. Understanding Pension can improve your financial planning and help you achieve your money goals.
How does Pension relate to 401(k)?
Pension and 401(k) are related financial concepts. A tax-advantaged retirement savings plan offered by employers that allows employees to contribute a portion of their salary before taxes. Many employers offer matching contributions up to a certain percentage.
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