A pension plan is a retirement savings vehicle that provides a regular income to individuals after they retire. It is usually sponsored by employers and may require employees to contribute a portion of their salary towards the plan.

Saving for retirement is crucial because it allows individuals to maintain their standard of living and financial independence during their non-working years. It provides a source of income when regular paychecks stop coming in and helps ensure a comfortable retirement.

Pension plans offer several advantages, including:

• Guaranteed income: Pension plans provide a stable and predictable income stream during retirement.
• Tax advantages: Contributions to pension plans are often tax-deductible, and the investment earnings grow tax-deferred until withdrawal.
• Employer contributions: Many pension plans include employer contributions, which can significantly boost retirement savings.
• Long-term financial security: Pension plans help individuals build a nest egg for the future, ensuring they have the financial resources to support themselves in retirement.

Pension plans are typically offered by employers to their employees. However, self-employed individuals and those without access to employer-sponsored plans can contribute to individual retirement accounts (IRAs) or other retirement savings vehicles.

It is never too early to start saving for retirement. The earlier you begin, the more time your money has to grow through the power of compounding. However, even if you start later in life, it is still important to save as much as possible to ensure a comfortable retirement.

The amount you should save for retirement depends on various factors, such as your desired lifestyle in retirement, expected expenses, and other sources of income. A general rule of thumb is to save at least 10-15% of your income, but it’s best to consult with a financial advisor to determine your specific retirement savings goal.

If you don’t save enough for retirement, you may face financial hardships during your non-working years. You may have to rely on government benefits or other forms of assistance, compromise your desired lifestyle, or even continue working past your desired retirement age. Starting early and saving consistently can help avoid these potential challenges.