Summary of The Language of Retirement Planning

The key to successful retirement planning is in understanding the plans and provisions available to you. The first step is learning the common terms used by all retirement plans. Tax terminology is also important to a clear understanding of the benefits provided by retirement plans.

Be sure to familiarize yourself with the key plan types such as defined benefit and defined contribution. Know your company’s offerings, such as 401(k), 403(b), Keogh, SEP, and SIMPLE.

All retirement plans will offer you an annuity payout option. Before accepting or rejecting this feature, it is important to understand what the provisions mean and how they factor into your long-term retirement plan goals. Don’t overlook the pitfalls and penalties for early distributions, overfunding, and failure to take required minimum distributions.