A pension plan is basically an arrangement that provides you regular income when you are no longer generating fixed income from employment. It is a saving vehicle that allows you to accumulate tax-free funds that can be used later as retirement income. Also called superannuation plan, a pension plan is a kind of guaranteed annuity. It is usually set up by the government, employer, trade union, insurance company or employer association.
When you retire, you stop earning money and become dependent upon your guaranteed sources of money such as pension, returns on investment and rental income. Of these pension it is the most reliable resource of money. It is an efficient way to save tax all through your employment period, amass money on which the tax is never applied, and get regular income throughout your life.
The big question that comes to the fore at this point of time is how much pension would be needed to ensure an unproblematic and uncomplicated retired life. This is where a good retirement pension calculator becomes Age calculator indispensable. On the one hand, it helps you to calculate the total amount of pension you would need to meet all your expenses and liabilities after you stop working, and on the other hand, it helps you to select the best superannuation plan. Furthermore, it also helps you to ascertain the various benefits that you would obtain from the pension plan in different retirement age scenarios.
The amount of pension you get depends upon two factors, firstly, the amount of money you put in the plan, and secondly, the age at which you wish to retire. A good retirement pension calculator will help you to determine when your superannuation plan will start generating good results, how much money you will get in hand per month, and what all you can do to increase the yield. Furthermore, you will also be able to calculate the right age to retire.
Yet another benefit of a proficient retirement pension calculator is that it helps you to select the best pension plan. There are different kinds superannuation plans are available, and all of them produce different results in different periods of time. It is simply impossible to examine and evaluate each one of them to track down the best plan.
With the help of the pension calculator you can easily decide whether to choose a define benefit plan, where you get a fixed amount depending upon you salary and the number of years you contribute, or defined contribution plan, where the monthly income depends upon the amount of money contributed and the type of investment vehicle used. Besides these there are hybrid plans that combine the features of both the above plans.