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What Are the Different Kinds of Retirement Benefits?

After working everyday for 20 years or so, an individual certainly looks forward to the relaxation that retirement brings. Then again, there is always the other side of the coin - when one stops working, the income normally stops as well. While this may be the case, it does not have to be so all the time. The good news is that there are benefits that workers - or ex-workers - can receive when they retire. These are called retirement benefits. This term refers to the sums of money that retirees receive on a regular basis.

Retirement benefits come from a variety of sources. One of the most common sources of retirement benefits is Social Security. During the years that a person is part of the workforce, he pays a certain sum of money every month towards Social Security. This is called Social Security contributions. Most of the time, these contributions are automatically deducted from a worker’s wages by the employer. When the person reaches retirement age, he can avail of retirement benefits from Social Security. The amount of money that the retiree receives depends on many factors including the length of time that the person made contributions to Social Security, as well as the number of his dependents.

Another source of retirement benefits are pension or retirement plans. Today, it is common for people to take out private retirement insurance plans. This can be done early in one’s life. The idea is similar to Social Security, except that the payments are made to a private entity, such as an insurance company. The amount of retirement benefits will depend on the retirement plan that one takes out.

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