A Guide to Getting a Pension

I’d like to share with you a basic guide as far as getting a pension. So a pension is ultimately a type of structure where you’ve been paying into this retirement plan where essentially then you’re going to be receiving a lifetime income stream. So it would be a guaranteed income for you potentially. If you’re married, there might be different survivorship benefits that you can choose from where potentially if you pass away, your spouse can then receive the same level of income or maybe some percentage, 75%, 50% as a lifetime income stream. So this is one of the things having been at Centennial Wealth Advisory now for 17 years, when I think back to the early 2000s and starting here and seeing it was most common that people had a pension plans. They were essentially going into retirement based on the assumption, well, I’ve got this pension income. I’ve got some Social Security income. And my needs are pretty well met. And then there’s oh, maybe saved for retirement for those extras. Well, that’s drastically changed now. We somewhat rarely see folks coming into the office that have these pensions. So where can you still get them? Well there’s different government jobs where you can be set up in a pension or maybe perhaps a union type of structure where you’re going to have that guaranteed income stream. Those are probably the largest groups. We noticed here in the state of Michigan for teachers. A few years ago they changed that and focused more primarily on 401K plans. We also noticed that with Munson Health Care as another company who changed that structure and put more of the emphasis into the employees hands within the different retirement plans to contribute and then therefore generate some income. So the other thing that I found interesting when reading through this article from U.S. News is it talked about marrying someone that has a pension plan. So I don’t know if that’s a, for those single folks out there, that might be a new pick up line. Hey, I’ve got a pension plan. Do you want to date? But the other idea that I wanted to put out there is how you can create your own pension plan. Essentially what you’re doing with a pension plan is generating some type of guaranteed lifetime income. Which is ultimately what insurance companies do through different types of annuities. Now that’s a whole other topic that you’d want to get into. With annuities, there’s going to be different cost involved. There might be surrender penalties if you wanted to cash out. There’s different options as far as either for a single lifetime or if you’re married, for a joint lifetime payout. And again, a variety of different options. So as you’re evaluating your retirement plan, if you have specific questions about a pension or creating your own pension, feel free to give us a call.