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Corporate Retirement Plan: Win-Win Game

If you are earning a decent amount, but have no clue of what’s coming to you in the next twenty or so years, then take two minutes to read this quick and informative page. It’s a well accepted fact that you cannot predict the future perfectly. There can be good times and there could be bad. So, it’s always good to prepare for the worst and hope for the best. We call this future planning.

Time and trends are changing quickly. Life insurance and health care plans, which were once considered to be uninteresting, are common and expected. But answer this question honestly, how do you see your post-retirement life? Have you ever thought about it? It is great if you have, but it’s highly likely that you haven’t. Nobody likes to think about growing old nor is it favorable to plan for your life when you’re older. The truth is, you’re not going to stay young forever. Old age is inevitable. So, it's important for you to plan for it accordingly.

Why Do You Need A Retirement Plan?
One day, you will have to say goodbye to your office life, but you’ll still have to pay bills, and we haven’t formulated the current trend of inflation. Mere savings won’t help your situation. You need a pension or retirement plan. These plans are the type of policies that occur between a person and a company. You pay the regular small amount to the company as a “premium” until the time it reaches maturity or you’re finally retired. The company will then regularly pay you a handsome amount every month till you’re alive.

Corporate Retirement Plans
Corporate Retirement Plans are similar to personal retirement plans. The only difference is that it’s a formal agreement between employees and the company or with the employee union with the company. The company takes care of its employee’s retirement benefits by taking a share from your earning and adding a percentage of their own to create a corporate pension scheme. These plans are typically formulated by taking into consideration the employee's designation, length of employment and the amount that they contributed to the company.

So basically there are two types of corporate pension plans, which are benefit plans and contributory plans. As the name says, benefit plans are a big plus to the employees. The employer arranges the cash to fund these plans and the premium amount is calculated according to a formula, that takes consideration of the duration of employment, salary history, etc. On the other hand, contributory plans give no promise to the employee about the benefit he will receive after retirement. The post-retirement benefit depends upon the successful contribution of the investment scheme.


A Corporate Retirement Scheme makes employees feel safe and secure, by creating a bond between employee and employer. The result is total positivity and a higher degree of loyalty towards the corporate, which is simple management principle. However, there are some direct benefits too. The benefits to the employees are obvious, who will be getting an amount of compensation even after their retirement. On the employer’s side, this scheme will positively affect the tax situation as their 401(k) contribution. This will open many investment options for them, plus it might also reduce certain taxes. But yes, the contribution and the formulation must be carefully applied or it will give unwanted strain to the corporation because the retired employees will get the benefits until they die. There are specialized financial experts available to take care of the situations to best suit the needs of all those involved.
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