Retirement Benefits

A goal for most of us is to one day be able to retire from our jobs and to have time for travel, hobbies, and whatever else we don’t get to do today because we’re busy earning a living. If we want to do these things, we have to carefully plan for our retirement. In this section we describe the Employee Retirement Income and Security Act (ERISA) and then describe the most frequently offered types of retirement accounts. The Employee Retirement Income and Security Act of 1974 (ERISA) is a federal law that protects retirees in the private sector. Just a few of the benefit plans covered under ERISA are pension, health, disability, life and Accidental Death and Dismemberment, and cafeteria plans. Under ERISA, private employers must have written plans documenting the pension benefits they provide their employees. The plans must specify what the benefits are, who is eligible to receive them (as well as when and how), and how the plans can be terminated by employers. ERISA’s major function is to ensure that firms t