00:10 Defined-Benefit Plans
01:07 Pension plan
01:19 Cash balance plan
01:33 Multi-employer plan
01:44 Government pension plan
01:53 Non-qualified plan
02:06 Defined-Contribution Plans
02:47 401(k) plan
03:00 403(b) plan
03:13 Individual retirement account (IRA)
03:31 Simplified Employee Pension (SEP) plan
03:48 Profit-sharing plan
04:06 Annuity plans
04:23 Fixed Annuity
04:42 Variable Annuity
05:13 Single Life Annuity
05:34 Survivor Annuity
06:01 Defined-Contribution Plans in Malaysia
06:07 Employees Provident Fund (EPF)
07:30 Voluntary Provident Fund (VPF)
07:51 Private Retirement Schemes (PRS)
08:19 retirement account 2 (RA2)
08:36 Annuity plans…(read more)

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Types of Retirement Plans in the U.S. & Malaysia

retirement planning is crucial for individuals across the globe. It involves making financial arrangements to ensure a comfortable and secure future while enjoying the golden years. In this article, we will explore the types of retirement plans available in two different countries – the United States and Malaysia.

Retirement plans in the United States are primarily classified into two categories – employer-sponsored plans and individual retirement accounts (IRAs). Employer-sponsored plans are offered by employers to their employees as a benefit. They include 401(k) plans, 403(b) plans, and pension plans.

1. 401(k) Plans: This is the most common retirement plan in the U.S. It allows employees to save a portion of their salary, which is then invested in various investment options such as stocks, bonds, and mutual funds. Contributions to a 401(k) plan are typically tax-deferred, meaning the amount is not subject to income tax until withdrawn.

2. 403(b) Plans: Similar to 401(k) plans, 403(b) plans are offered to employees of public educational institutions and non-profit organizations. They also allow tax-deferred contributions and offer a range of investment options.

3. Pension Plans: Pension plans are also employer-sponsored plans, but they are less common nowadays. In a pension plan, the employer contributes funds on behalf of the employee, and a fixed amount is guaranteed as a monthly income during retirement.

On the other hand, retirement plans in Malaysia are categorized into three main types – the Employees Provident Fund (EPF), private retirement schemes (PRS), and voluntary retirement schemes.

1. Employees Provident Fund (EPF): EPF is a mandatory retirement savings plan for employees in Malaysia. Both employers and employees make monthly contributions at a fixed rate. The EPF provides retirement benefits in the form of a lump sum, as well as a monthly pension, depending on the accumulated funds.

2. Private Retirement Schemes (PRS): PRS are voluntary retirement plans managed by private financial institutions. These schemes offer individuals a choice of funds to invest in, based on their risk appetite. Contributions to PRS are eligible for tax relief, encouraging individuals to save for retirement.

3. Voluntary Retirement Scheme (VRS): VRS is a self-funded retirement plan that provides an additional avenue for individuals to save for retirement. This scheme allows individuals to make voluntary contributions to a retirement fund of their choice.

Both the U.S. and Malaysia offer retirement plans with the goal of ensuring financial security during retirement. While the U.S. system heavily relies on employer-sponsored plans such as 401(k)s, Malaysia focuses on a mandatory provident fund supplemented by voluntary schemes like PRS and VRS.

It is important for individuals in both countries to understand the available retirement plans, evaluate their financial goals, and choose a plan that aligns with their needs. Planning early and saving consistently, regardless of the type of retirement plan, can help secure a comfortable retirement in the future.