Things You Need to Know About Individual Pension Plans
An individual pension plan, or IPP, is a retirement savings plan that is designed for individuals. Unlike a traditional company-sponsored pension plan, an IPP allows you to contribute money to your own retirement account. This can be a great way to save for retirement, and there are several benefits that come with owning an IPP. Visit ex-ponent.com to learn more!
First, let’s talk about what an individual pension plan actually is. An IPP is a retirement savings plan that you can set up on your own, rather than through your employer. It allows you to contribute money to an account that will be invested and grow over time, so that when it comes time to retire, you will have access to additional funds for your golden years. One of the biggest benefits of having an IPP is being able to save for retirement without relying solely on a company-sponsored pension plan. With so many companies closing their pension plans or switching them over to much less beneficial 401(k) plans, more and more people are finding themselves forced into saving for retirement on their own. An IPP gives you this opportunity, allowing you to save for your retirement without being tied to a big corporation.
Another benefit of having an IPP is the flexibility that it gives you. With many traditional 401(k) plans, you are limited in the types of investments that you can make and how much money you can contribute each year. This can end up restricting your ability to grow your savings over time, especially if there are changes in the market or other factors outside of your control. An IPP gives you more freedom when it comes to investing, allowing you to choose from a wider variety of options and invest as much or as little money as you want each year. Additionally, with an IPP plan, any increases in income that occur during the course of your career will also be reflected in your retirement savings. If you have a traditional 401(k), any increases to your salary will not be reflected in the amount that is contributed to your account, which means that you may end up saving less than you would with an IPP plan.
Overall, having an individual pension plan can be a great way to save for retirement. Not only does it give you more flexibility and freedom when it comes to investing, but it can also help ensure that your income will increase over time, making it easier to save more money by the time you retire. If you’re interested in setting up an IPP of your own, talk to a financial planner or other advisor today!