Does your employer offer a retirement plan? If so, you should look into these different plans. A common plan that’s offered is a pension plan, right next to the 401(k).
This is a retirement plan where employers add funds to a worker’s future benefits.
Pension plans offer many benefits. However, there comes a time when you immediately need the funds, whether for an emergency or you want to purchase something.
If this is the case, you can try getting a pension advance. This is when you receive a lump-sum payout from your pension plan.
If you’re looking for ways to get a pension advance, here are 4 effective methods.
- Find a Lender
The first step you’ll want to take is finding a lender. They will give you the lump sum that you want. However, this method has its drawbacks. You’ll have to agree to pay them a portion of your future pension payments.
The first step is finding a lender. Fill out the application and discuss the terms and conditions with the lender. You want to ensure you only have to repay the advance and they’re not trying to sell you anything else.
- Get a Pension Loan Instead
Another alternative to a pension advance are pension loans. This is similar to the pension advance, except you pay back the loan in monthly installments instead of foregoing future payments to the lender.
A pension loan is especially beneficial to those with bad credit. There are pension loans that don’t require a credit check and these are more flexible. All you need to do is find a lender.
- Check Your Plan
You may be able to prevent finding a lender if your plan lets you borrow money from your pension. But you have to check your plan and see if you qualify. The IRS lets you borrow money from pension plans that fall under these sections:
- 403(a)
- 403(b)
- 401(a)
It’s best to consult with an accountant and a financial advisor about this.
- Contact Your Employer’s HR Office
Since pension plans are provided by your employer, another easy place to start is by contacting your employer’s HR office. If you’ve been with the company for a while, you may qualify for an advance.
From here, listen to the instructions that HR provides. You’ll likely have to request and submit an application.
Include information such as the amount you want and the duration of time to pay it off. Keep in mind, most loans come with a maximum borrowing amount and a maximum repayment time.
Will You Get a Pension Advance?
A pension plan is a retirement account sponsored by employers. If you can’t wait for retirement, you can get funds taken out with a pension advance.
The easiest way to get this advance is through a lender, but you also have other options. You can also opt for a pension loan if you have a bad credit score.
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