Taking Employee Benefit Plans Into Account When Planning Your Retirement

Employee benefit plans can be great when you’re planning for retirement, but you can’t always count on them. Here’s what you need to know about how these plans benefit you during your retirement years.

One of the most basic employee benefits that many businesses offer is a matching 401k. If you make steady contributions to your 401k account throughout your working life, your company will match a certain percentage of that. You should always max out these contributions to your retirement account if your company will match them. It’s basically free money that’s tax advantaged – the extra cash can really help you save for your golden years. Even if you’re only talking about a few hundred dollars a year, that can become a good contribution over time when compound interest does its work.

Of course, you might also get retirement benefits after you retire from a company you’ve worked at for only a few years, depending on their policies. You need to know what these benefits are before you can properly plan your retirement. Talk with the Human Resources Department to see what your benefits are going to be like.

Sometimes retirement benefits are monthly payments made directly to you from the company. Other times you’ll just get healthcare during retirement, which can be a huge help with bills in your golden years. The benefits that you get from your company will only be around, though, as long as your company stays viable (and doesn’t go bankrupt or shut down). It’s important to keep this in mind when planning, and to never depend entirely on your company retirement benefits as your sole source of income. You should be able to get by financially even if the company benefits don’t come through forever, or even at all.

Creating a retirement plan is one of the most important things you can do for your future financial security, and your plan will be better if you take every source of potential future income into account.