What You Need to Know: Retirement Benefits

By Eric Yoder
Washington Post Staff Writer
Wednesday, November 19, 2008; 12:00 AM

If you're looking into government employment or have been hired only recently, possibly the last thing on your mind is retirement.

Still, you should understand that benefit. It could be important in your career planning. One reason so many federal employees stay with the government is that its retirement benefits stack up well against what's available elsewhere┬┐so well that they're often called "golden handcuffs" because they induce people to stick around for the payoff at the end.

In recent years many private sector employers have dropped "defined benefit" programs, which are traditional retirement programs that pay a certain amount based on a formula involving the employee's years of service and salary level. If they have retirement programs at all, they're more likely to offer "defined contribution" plans such as 401(k)s where the employer and employee typically make a contributions but the money available to the employee at retirement depends on the earnings of those contributions.

The government, though, offers both types of benefits.

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