noun. a pension; the pay a retired person gets. Social Security provides retirement pay for all elderly persons who have worked a minimal number of months during their lives and contributed a portion of their paycheck (typically matched by their employer) into a government fund.
How long do you receive pension?
Under a period-certain life plan, your pension guarantees payouts for a specific period, such as five, 10 or 20 years. If you die before the guaranteed payout period, a beneficiary can continue getting payments for the remaining years.
What kind of payment is required for a pension plan?
Because pension plans are intended to provide periodic payments for life, certain forms of payment are required by law. For single employees, the required form of payment is a straight-life annuity, which typically provides a monthly payment based on the plan formula.
Do you get a pension or social security when you retire?
An employer-provided pension is only one source of retirement income; many retirees also receive monthly Social Security payments. Some employer pension plans offer a level income option for those who retire prior to Social Security eligibility.
What’s the difference between a pension and a lump sum?
The lump sum equals the amount that must be invested today—given assumptions about life expectancy and investment returns—to produce a lifetime of payments. Choosing a lump sum eliminates the certainty of periodic payments for life and puts the retiree in control of the pace at which funds are used.
What kind of pension do you get if you are married?
For married employees, the required form of payment is a 50-percent joint-and-survivor annuity designed to provide a “joint” benefit while both the retiree and spouse are alive and half of that amount (the 50-percent “survivor” annuity) to the spouse upon the death of the retiree.
