Finally, I made a decision and joined with my employer Defined Benefit pension plan. It is a late game, but I am in now.
Currently, I am working for a big employer in Canada, and the company has a Defined Benefit pension plan and it is an optional . Therefore, employees can join if they wish. Also, the pension plan is available for permanent employees only.
I became a full time permanent employee in fall 2011 after a series of part-time and contract terms. During the time, the pension plan did not make sense as we have no control or information about where our money is invested. The plan was too complicated for me.
Also, I had massive of credit card and student loan debts (almost $60 000). And, I was planning to build my own retirement income by investing in dividend stocks.
For last few years, I didn’t even think about joining the plan or show interest in learning and understand its benefits. I completely forgot about it, and was focusing on building my own retirement plan in my own terms.
Now, almost four years late, my financial situation is so much better than in 2011. My net worth hit $100K and I feel little bit financially secure than four years ago.
But, I wasn’t happy and didn’t want to stop there. I was looking for more opportunities to strengthen my retirement income by diversifying asserts and income streams.
Therefore, I was looking for an alternative source of income along with my dividend income. As you know, having a multiple streams of income is always secure than relying in one or two incomes.
I studied few options including my company pension plan. I learned about the security, financial strength and reliability. Good thing is that pension benefit is protected against inflation. Finally, I made a firm decision and joined in my company DB pension plan 😀 .
I filled out an online form with few my personal questions. It took only 10 minutes.
Within two days, I received a confirmation email with little more details including the bi-weekly contribution rates and expected income during my retirement periods.
That’s it! I am a DB pension plan member now.
One sad thing is that I need to contribute almost $200 from my bi-weekly pay cheque. Therefore, my monthly cash flow will be lowered by almost $400.
Update: Please note I have increased my bi-weekly contribution limit to $250 from January 2016
But, the good thing is that the contribution is automated. Thus, I will get used with the lower income because of automated contribution. Also, it is tax detectable, so I won’t see much different in my pay cheques.
Now, I have new asserts class – Defined Benefit Pension Plan. I have added another layer of protection for my retirement dream. It will get stronger and bigger every month.
I will keep looking for alternative sources of income to strengthen my dream retirement. As I mentioned often, having a multiple streams of income is always secure than relying in one or two income sources.
Thank you so much for being in my finance journey!