Dependable Retirement Planning Advisors

Muncie Retirement Planning

Many Indiana employers provide Muncie retirement planning that is included in a typical package of benefits for all or some of their employees. There are also some Muncie employers who offer this Indiana retirement planning benefit to their part time employees (even if other benefits such as health care are not offered to part time employees. Usually though, all people who are employed at full time status have a Indiana retirement planning service offered to them by their Muncie employer. If you fall under this category, or have knowledge of such a program being offered through your current place of employment and you aren't taking advantage of it, you need to start. Planning for your Muncie retirement cannot be put off.

What is a Pension?

You may remember when you were younger hearing your parents discussing their IN employer's pension plan. While most people think that a pension is no longer an option for them when considering Muncie retirement planning, there are still some Muncie employers that offer this benefit to their employees. For this reason, it is important to know and understand the differences and similarities between pension plans and other Indiana retirement planning options such as 401Ks.

What are the Similarities?

The first step to Muncie retirement planning is to understand what this means. All of these types of accounts have one goal in mind, and that is to help you save money for when you retire. Of course, to retire means to walk away from working and live off of the money that you have (hopefully) been saving during the years you have worked as an adult. Regardless of the account type, all IN retirement planning accounts have this shared goal.

What is Different About Them?

So, if all Muncie retirement planning accounts have the same goal, why are there more than one type, and which one should you have? The first question is simpler to answer than the second. There are a few reasons that more than one account option is available for your IN retirement planning.

The first reason there are different options is that each option has a different method and source of paying in. For example, both a pension and a 401K plan involve regular deposits, typically at the beginning of each employee pay cycle. The difference is that where a pension plan is paid into by the employer, a 401K is typically paid into by the employee. Of course, there are always variations that exist. There are some Muncie employers that allow their employees to make like contributions into their pension account. There are also some companies that provide matching contributions for their employees. This means that if an employee contributes 5% of their pay into his or her 401K Muncie retirement planning account, the company will also contribute that amount.

Another similarity that these two account types share is an idea known as vesting. Whether your Muncie employer contributes the full amount to your Muncie retirement planning account (as in a pension), or just contributes some money (as in 401K matching) they do not just do this out of the kindness of their hearts. They consider these contributions as investments in you, and they expect something in return. This is where vesting comes into play.

The idea of vesting basically means that the company puts money away for you, but will not allow you to access that money until you have been in their employ for a certain number of years. This time frame varies by employer and also by account type (since the employer typically contributes less to a 401K Muncie retirement planning account, the vesting time is usually shorter than it is with a pension account).

As an example, typically pension plans are set up to be vested after twenty or twenty-five years. So, in order to receive the money that their employer has been setting aside for them, every person who is eligible for a pension from their employer must be employed by said company for a minimum of twenty years give or take, depending on the policy of the employer.

As with pensions, 401K Muncie retirement planning accounts that have employer matching contributions as an additional benefit have vesting requirements as well. These requirements (as mentioned before) are typically not as stringent as they are with pensions. Typically, they are also on an exponential scale. For instance, employers will allow you after 5 years of employment to have a percentage of what they have contributed added to your available balance. So, as a hypothetical, after 5 years you might get 30% of your employer's contributions, 40% after 10, and so on. This is an important benefit to understand, because if you leave your employer for another, you can only transfer your contributions and your employers vested contributions to your Muncie retirement planning account.

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Retirement Planners In Muncie

Eric Wasson
Eric Wasson
8555 River Road
Suite 350
Indianapolis, IN 46240

Ryan Veldhuizen
Ryan Veldhuizen
550 Congressional Blvd, Suite 115
Carmel, IN 46032

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