Pensions can be a confusing world, and in a past Planner post we addressed some of those common misconceptions about being a Plan member. Now, we’re back with volume two; untangling fact versus fiction when it comes to your pension plan.
Here a few more pension myths are debunked to help clear things up so you can tell what’s true and what isn’t.
- My pension is only worth what I contribute -> False.
Your CAAT DB pension has a big return on investments for your contributions. According to one recent study, * for every dollar contributed to a large, jointly governed DB pension plan like CAAT, you are estimated to receive $5.32 in retirement income. This is a lot higher payout compared to an individual savings plan. And the best part is your contributions are usually paid back to you in the first five years of retirement, while your pension keeps going as long as you live. You get more bang for your buck, without the stress and worry of managing your investments.
- My employer also makes contributions to the plan on my behalf -> True.
Employers that participate in the CAAT Pension Plan want so much more for their employees. In addition to offering you an amazing retirement savings plan, they also make contributions on your behalf, emphasizing an employee-first work environment.
- I have to retire at the traditional retirement date of age 65 -> False.
Your CAAT plan offers a lot of flexibility so you can choose to retire at the time that’s right for you. The traditional retirement date used to be age 65, but times have changed! CAAT gives you options so you can make the decisions that work best for you. You may be able to retire as early as age 50, or as late as the year you turn 71! Your pension is calculated using a formula, so it’s easy to estimate the retirement date that’s right for you. Visit our website to run an estimate and see more information on retirement planning and your available options.
- I can keep my pension, even if I leave my employer -> True.
Leaving your employer doesn’t mean leaving your pension. You can choose to keep your pension with CAAT until you’re ready to retire. The pension you earned with CAAT keeps growing – with conditional inflation protection increases – even before you retire! You don’t have to take on the burden of investment responsibilities. And you can rest easy knowing your pension will be waiting for you when you’re ready to collect it, no matter how far off that is for you.
* HOOPP, The Value of a Good Pension, 2021