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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Psychstache on November 02, 2013, 02:12:22 PM

Title: Thinking about an employer mandated plan
Post by: Psychstache on November 02, 2013, 02:12:22 PM

Hey Guys,

I have been trying to work out an AA for investments that works for me and it got me to thinking about my state pension. The way the plan is structured, 6.4% of my gross pay is taken from my paycheck and set in an account in the pension fund. The amount that I have contributed accrues interest at a rate of 5% annually. So, given that this money has a guaranteed rate of return, should I be thinking about it as part of the Bond portion of my AA? Is there a better way to categorize it?

Note: I don't think I will stay with the employer long enough to actually get a worthwhile pension, so I imagine eventually it will get rolled into a traditional IRA, I'm just trying to figure out how I should count it for the time being.

Thanks!

Title: Re: Thinking about an employer mandated plan
Post by: aj_yooper on November 02, 2013, 03:06:07 PM

If you own the funds and can take them out and they pay a fixed return, I would say you have a fixed income investment.  To me, it is more like a CD.