Working in a job that provides you with a pension is one of the major benefits of your chosen profession. A pension will ensure that you get to retire at or before the retirement age of most other professionals and not have to worry about having enough money in retirement. Most people earn their full pension after working 25 years in their profession. Here is some information on how to move a pension when you change jobs in New York.
If you are the owner of a defined benefit pension plan today, it might be required by your employer to have worked at least five years with the company in order to be considered 100 percent vested.
If the above isn't the requirement, your employer might have a graduate vesting schedule. This schedule provides you with a percentage of the vested pension after a set number of years until you reach 100 percent. Should you leave the company before the pension vested 100 percent, you can only take the portion of the pension that has vested.
For the most part, if you decide to leave a company for a new job when you have a defined benefit pension plan, you can either take a lump sum now or annuity payments. There are some plans that allow you to take a combination of the two.
If you decide to go with the lump sum, it's best to put that money into a rollover Individual Retirement Account (IRA) in order to avoid taxes being levied on the lump sum.
Moving your pension when you change a job doesn't have to be a difficult process. Make sure you follow the tips outlined in today's post so your pension is moved properly and you don't lose any of the benefits you already earned.