As discussed earlier, this is called regular periodic payments. It is the law that a pension must provide a life annuity option. These payments would even count for one’s spouse. This is the safest way to get a pension because it provides a steadiness income. The annuities are not adjusted to inflation; this can mean one can lose purchasing power as time goes. The second kind of pension is called defined contribution plan, which the employer agrees to give the employee contribution to the pension, however, this does not mean the employee would get benefits. The lump sum amount would be determined by the interest rate and life expectancy hypothesis. That would equal the total of expected lifetime annuity payments. This definitely gives one more fexiablity with the money. One can decide what to do with the money, and how one would want to invest the money. With taxes, it is beneficial to show it in the IRA to avoid tax. There is also the combination one, but it is very rare but
As discussed earlier, this is called regular periodic payments. It is the law that a pension must provide a life annuity option. These payments would even count for one’s spouse. This is the safest way to get a pension because it provides a steadiness income. The annuities are not adjusted to inflation; this can mean one can lose purchasing power as time goes. The second kind of pension is called defined contribution plan, which the employer agrees to give the employee contribution to the pension, however, this does not mean the employee would get benefits. The lump sum amount would be determined by the interest rate and life expectancy hypothesis. That would equal the total of expected lifetime annuity payments. This definitely gives one more fexiablity with the money. One can decide what to do with the money, and how one would want to invest the money. With taxes, it is beneficial to show it in the IRA to avoid tax. There is also the combination one, but it is very rare but