A retirement Saving Account (RSA) is a dedicated account opened with a Pension Fund Administrator as specified under Section 11 of the Pension Reform Act of 2014 Every employee or contributor under the new pension scheme is expected to open RSA in his/her name with a PFA of his/her choice into which all his/her contributions and returns on investment are paid.
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Oak Pensions… Securing Your Retirement!…(read more)

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As we age, planning for our retirement becomes a vital part of our financial management. One of the most significant components of retirement planning is setting up a retirement savings account that can aide you in maintaining your quality of life after you stop working. Here’s a Pension 101: What is a Retirement Savings Account?

A retirement savings account is an investment account specifically configured for accumulating funds for retirement. This account functions independently of an individual’s employer pension plan or Social Security. A retirement savings account can either be a defined benefit retirement pension plan or a defined contribution retirement savings account.

Defined benefit retirement pension plan: This plan is created and managed by an employer. Employers are responsible for determining the amount of money an employee will receive after retirement. Employees are not involved in the investment decision-making process and have little control over the amount of their contributions.

Defined contribution retirement savings account: This plan is designed for an individual to accumulate personal retirement savings. The most common types of defined contribution retirement savings accounts are a 401(k) or an Individual retirement account (IRA). These accounts can either be from an employer or created individually. 401(k) contributions are typically deducted from your paycheck pre-tax, often with an employer contributing funds as well. IRAs, on the other hand, are set up by an employee and contributions are made from a personal bank account.

The amount of money you contribute to your account, as well as the investments you choose, ultimately determine the amount of money you will have during retirement. The earlier an individual starts investing in their retirement savings account, the more likely they will have a more stable pool of resources for their retirement.

In conclusion, creating a retirement savings account is a crucial component of retirement planning. Depending on type, either a defined benefit retirement pension plan or a defined contribution retirement savings account, an individual can determine the amount of money coming in during their retirement years. The earlier an individual starts investing in their retirement savings account, the higher the likelihood they will have a comfortable retirement.