The terms retirement plan or superannuation refer to a pension granted upon retirement . Non-qualified retirement plans are deferred compensation plans that allow the employee to delay receiving earned wages and income until a later date. The purpose of a retirement plan is to take advantage of tax breaks.

Plan distributions are generally subject to a 20% mandatory federal income tax withholding rate. A working spouse not covered by a retirement plan through employment may make a tax-deductible contribution to an IRA despite the other spouse’s coverage under an employer-provided retirement plan. A marketing plan is a document that details how a business plans to persuade people to buy its products or services.

While governmental 457 plans have special catch-up provisions for those age 50 or older as noted above, they enjoy an even greater contribution amount in the three years before retirement. Many small pension plans are exempt from PBGC pension insurance coverage. Cash Balance Plans: Cash-balance plans are a type of defined contribution retirement plan where employers make annual contributions for each employee; the contributions earn interest at rates similar to Treasury bonds.

Benefits typically are not payable until normal retirement age and usually are paid in the form of a lifetime annuity. Many people choose to retire when they are eligible for private or public pension benefits, although some are forced to retire when physical conditions don’t allow the person to work any more (by illness or accident) or as a result of legislation concerning their position. At retirement, defined contribution plan benefits are typically paid in installments or as a lump sum; however, they may also be paid as an annuity.

Source: Retirement - Retired and Retirement