A pension plan is a retirement plan that provides a specific amount of income to employees after they retire. The amount of income is based on factors such as length of service and salary history.

One of the biggest benefits of a pension plan is that it provides a guaranteed source of income during retirement. Unlike 401(k) plans, which are subject to market fluctuations, pension plans provide a stable and predictable income stream. Additionally, pension plans typically provide survivor benefits to the employee’s spouse or beneficiaries.

Pension plans have become less common in recent years, particularly in the private sector. According to the Bureau of Labor Statistics, only 16% of private sector workers in the US had access to a defined benefit pension plan in 2020. However, pension plans are still prevalent in the public sector and among unionized workers.

If you are employed by a company or organization that offers a pension plan, you should receive information about the plan from your employer. This may include details about how the plan works, how much you and your employer will contribute, and what benefits you can expect to receive.

If you do not have access to a pension plan through your employer, there are other retirement savings options available. These may include 401(k) plans, individual retirement accounts (IRAs), or other investment vehicles. It is important to start saving for retirement as early as possible, regardless of the type of plan you choose.

Social Security is an important source of retirement income for many seniors, but it is not intended to be the only source. The average Social Security benefit in 2021 is $1,543 per month, which may not be enough to cover all of your expenses in retirement. It is important to have other sources of income, such as a pension plan or personal savings, to supplement your Social Security benefits.