MENU
EDU Articles

Learn about investing, trading, retirement, banking, personal finance and more.

Ad is loading...
Help CenterFree ProductsPremium Products
IntroductionMarket AbbreviationsStock Market StatisticsThinking about Your Financial FutureSearch for AdvisorsFinancial CalculatorsFinancial MediaFederal Agencies and Programs
Investment PortfoliosModern Portfolio TheoriesInvestment StrategyPractical Portfolio Management InfoDiversificationRatingsActivities AbroadTrading Markets
Investment Terminology and InstrumentsBasicsInvestment TerminologyTradingBondsMutual FundsExchange Traded Funds (ETF)StocksAnnuities
Technical Analysis and TradingAnalysis BasicsTechnical IndicatorsTrading ModelsPatternsTrading OptionsTrading ForexTrading CommoditiesSpeculative Investments
Cryptocurrencies and BlockchainBlockchainBitcoinEthereumLitecoinRippleTaxes and Regulation
RetirementSocial Security BenefitsLong-Term Care InsuranceGeneral Retirement InfoHealth InsuranceMedicare and MedicaidLife InsuranceWills and Trusts
Retirement Accounts401(k) and 403(b) PlansIndividual Retirement Accounts (IRA)SEP and SIMPLE IRAsKeogh PlansMoney Purchase/Profit Sharing PlansSelf-Employed 401(k)s and 457sPension Plan RulesCash-Balance PlansThrift Savings Plans and 529 Plans and ESA
Personal FinancePersonal BankingPersonal DebtHome RelatedTax FormsSmall BusinessIncomeInvestmentsIRS Rules and PublicationsPersonal LifeMortgage
Corporate BasicsBasicsCorporate StructureCorporate FundamentalsCorporate DebtRisksEconomicsCorporate AccountingDividendsEarnings

How Do I Invest Money in My Pension?

Employees are not able to control investments in a Pension Fund, but you can control a few variables. You cannot direct investments in your pension.

Since a pension is a type of Defined Benefit Plan provided by your employer, the company worries about the investments, and you will receive a fixed monthly payment that is calculated based on your age, salary, and number of years worked for the company.

If the company’s Pension Plan made more money than initially predicted, the company would simply withdraw money and add it to their profits, if it still leaves them enough of a surplus. But it doesn’t mean at all that your pension payments will increase.

The Pension Fund must adhere to guidelines and regulations involving the calculations of an enrolled actuary, and must file IRS Form 5500 (found here). It is important that employees remain aware of the health of their pension fund assets. Reports to pensioners are supposed to be distributed every year.

If there is a problem, the board of the company must be willing to discuss it with the pensioners. If all else fails, the Pension Benefit Guaranty Corporation (PGBC) insures pension payments up to a limit, but this may not be the entire pension you were expecting.

Pensioners may be able to choose whether their spouse will continue to receive benefits after the pensioner dies, even if that means they take a lower payout up front. Pensions may also offer a number of “years certain” on the payout, which means benefits will be paid for a certain number of years whether or not the pensioner is alive.

Can I Decide How My Money is Invested in My Defined Benefit Plan?
How are My Retirement Benefits Computed?

Ad is loading...