By: Fabiola Grosshan
Submitted: 2010-06-23 06:09:52 | Word Count: 355
Pensions have been around for many years, providing security to all types of workers from civil servants to ship builders. A pension in its simplest form is a binding agreement to provide income after the employee can no longer earn an income through full-time employment. Police, firefighters and military personnel all earn pensions based on the number of years each individual is employed. Each year as the employee works, a percentage of their income is invested into an account that earns interest. After a certain period of time on the job, a police officer may retire and earn full pay for the rest of his or her life. A police pension, then, becomes a very beneficial asset to secure a stable financial future.
At the time of retirement or before, military personnel, firefighters, and others experience financials stresses or situations that cannot be addressed by current revenue sources. Events like divorce, serious illness, unemployment, college tuition payments or other major economic reversals are occurrences that are often unexpected and unplanned for.
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A source to resolve these economic setbacks for civil servants like police officers is a police pension. The pension is an agreement between the state or municipality to pay the officer once retired. However, because the revenues are guaranteed and secured by the state, loans can be taken out against these pensions.
So a loan against a firefighter pension or military pension equates to a lump sum payment to the pension holder. The funds are paid out in today’s dollars so that the individual has the power to address current financial needs. Then, at very affordable interest rates, the loan is paid back. The military pension continues to grow as years of service are accrued, so future earnings are not at risk.
Careful consideration should be made before entering into any agreement affecting anyone’s retirement. Reputable agencies do exist to help currently employed or retired civil servants secure lump sum loans against their retirement.
