From the moment you start participating in Eder Retirement Plan, your money is held in two “buckets” or subaccounts. One holds the money you’ve contributed from your paycheck over the years (your employee subaccount), and the other contains the contributions made by your employer(s) (your employer subaccount). Now, imagine the big day has arrived, and it’s time to make some decisions. You’ve got choices!

Here’s what you can do:

  1. Annuity Option: You can put all or some of the money from both subaccounts into an annuity. Think of an annuity as your personal pension—once you retire, it provides you with a steady, life-long income. If you pass away before your employee contributions have been paid out, the remaining employee contribution funds are paid to your beneficiary. If you pass away before the remainder of your account is used up, the remaining balance stays in the plan to support other annuitants.
  2. Periodic Payment Plan (PPP): If you prefer more flexibility, you may want to select the PPP. With this option, you decide how much and how often you receive payments with your employee contributions; employer contributions must be distributed over a period of 10 years or more but to ensure you don’t outlive your money, we recommend longer terms such as 20 years, or possibly more . You can take all of your employee money as a one-time distribution, but your employer contributions must stay in the plan—either in an annuity or the PPP. If you live longer than anticipated and use all of the money in your PPP, you will no longer receive payments from this plan. If you die before you exhaust your funds, your money will go to your beneficiary.

Key points:

  • You can mix and match by putting some money in an annuity and the rest in the PPP.
  • Your employee contributions can be taken as a lump sum, but your employer contributions must be paid out through an annuity or the PPP.
  • An annuity provides lifetime income, while the PPP gives you control over the timing and amount of your payments, but only lasts as long as the money does.
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