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Retirement Topics - Retirement

The law requires that a plan pay benefits upon the latest of:

  • the participant’s attaining age 65 (or earlier, if the plan states a younger age),
  • 10 years of service with the company, or
  • the participant’s terminating service.

Even before the participant retires, he or she can talk to the employer about the types of retirement benefits the plan offers.

Defined benefit and money purchase plans must offer a benefit in the form of a life annuity, which means that the participant will receive equal, periodic payments, often as a monthly benefit, that continue for the rest of the participant’s life. This type of annuity is called a Qualified Joint and Survivor Annuity. Defined benefit and money purchase plans may also offer other payment options.

Defined contribution plans (other than a money purchase plan) may pay benefits in a single lump-sum payment as well as offer other options, including payments over a set period of time (such as 5 or 10 years) or a purchased annuity with monthly lifetime payments.

Additional resources:

Publication 560, Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans)
Publication 575, Pension and Annuity Income
Publication 590, Individual Retirement Arrangements (IRAs)
Publication 554, Tax Guide for Seniors

Page Last Reviewed or Updated: 16-May-2014