Retirement is when a person chooses to leave the workforce permanently. Though the concept of permanent retirement is quite new, there are many developed countries, as well as developing countries, have various types of pension schemes for the retirees after their retirement.
Due to the fact that many a times elderly people have to undergo treatments and healthcare, which are often very expensive and not covered by health insurance, a retiree may have to either resume back to full-time work or a part-time job because the retirements plans are often spent on their treatments. This is known as to ‘come out of retirement’. In order to prevent this, governments have devised retirement plans where the retiree receives an adequate amount of pension.
There are 3 types of retirement systems that we will be discussing here: Federal Employee, Teacher and Civil Service Retirement System.
Federal Employee Retirement System
This retirement plan is the primary plan for federal civilian employees of the U.S. Under the FERS the retiree will receive the benefits as yearly, structured gains or earnings. The amount which the retiree will receive depends upon their age, contribution (of amount) to the plan and the number of years that they have worked. Those who have been hired or employer later than 1983 are subject to Federal Employee
The benefits of FERS can be acquired in three ways: 1. TSP (Thrift Savings Plan) which includes contributions of the government, the employee; 2. Social Security; and 3. Basic benefits plan where the employee has to pay a minimum amount of money.
Teacher Retirement System
As the name suggests, this system was set up for teachers to help them with their retirement plans. Different TRS are set up for all the states of the U.S. and that is why there will be certain differences in the systems and their plans. However, all the organizations help their members to maintain and set up retirement plans and acquire its benefits.
Unlike any other system, the members contribute to their accounts on a regular basis. TRS offers the member healthcare and disability benefits as well.
Civil Service Retirement System
This is the system that was replaced by FERS in 1987. Just like any other plan, it provided civil service employees with retirement and healthcare benefits. Even though it was replaced, the people who were already a member of this system will not have to change to FERS as they will be receiving the benefits from this system.
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