D: I have been working for about 6yrs now and I know retirement is far. But when I do retire or when I quit this company and move on, they are bound to give me a large sum of money as monetary settlement. Now, can I request the company to instead put the sum that I will be entitled to into an account that I can access, if not in one shot, at least in small installments? Is that even an option and can I broach them on this? I am currently a bit strapped for funds since most of my income goes towards meeting monthly expenses and the huge mortgage I am paying off. When approaching the finance department in my office, therefore wish to know as much as possible on this issue before taking it forward.
Annuities in Retirement Planning
Ans: Well, yes, your company will give you a monetary settlement when you leave or retire, depends on which happens first. Usually, the amount paid on retirement is more than when you leave after a brief stint of few years. The money you would be eligible to say if you leave after 5yrs would only be your unused Leaves and Gratuity. Whereas, if you stick around for over 3-4 decades or so, and if you retire from the company, your eligibility is that much higher. This is called annuity in retirement planning which is offered by many insurance companies popularly known as annuity funds.
You have basically spent your entire career and adult life with the company and matching that would be what the company pays you. However, this can only be determined with time and not as on date. The company cannot assume you will quit in a few years or that you will be around till you retire. Therefore, they don’t make provisions to have that kind of money ready on hand to give to you, nor do companies have the policy of putting that money into an account for you to access from now onwards.
You are being unreasonable expecting your employer to sympathies with your current situation, anticipate a future situation and plan for that today! Most companies in fact send you your dues only a month or more after you have left them. So, it would instead be better for you to approach a friend or a bank and request for loan to meet your expenses. The other alternative would be to alter your lifestyle so it fits within your current income bracket. Hope this helps!