Investing Retirement Planning Learn How to Get a Pension Having a pension is good for your retirement By Dana Anspach Dana Anspach Twitter Dana Anspach is a Certified Financial Planner and an expert on investing and retirement planning. She is the founder and CEO of Sensible Money, a fee-only financial planning and investment firm. learn about our editorial policies Updated on April 6, 2022 Reviewed by Andy Smith Photo: AlexanderFord / Getty Images As you plan for retirement, you may want to figure out how to get a pension. There are essentially two ways to get one: Find an employer who offers a pension or figure out a way to create your own. Key Takeaways A pension is a source of guaranteed retirement income provided by an employer to those who qualify.To be eligible for a pension benefit, you usually need to work for an employer for a certain number of years. (That number can vary.)Many government jobs, at both the federal and state levels, offer pensions, as do some large private corporate employers—but it's not as common as it used to be.You could create your own pension by using your savings to buy an immediate annuity, which would pay you a guaranteed income for the rest of your life. What Is a Pension? A pension is a source of guaranteed retirement income provided by an employer to employees who have qualified for this benefit. To be eligible for a pension benefit you usually need to work for an employer for a certain number of years. (That number can vary.) Your pension benefit usually increases as you accumulate additional years of employment with that employer. Pensions are also referred to as “defined benefit retirement plans” as they are designed to define the future retirement benefit that you receive. Getting a Pension Through an Employer To get a pension, you can seek employment with an organization that offers pension benefits and then work there long enough to become eligible. Many government jobs, at both the federal and state levels, offer pension benefits. Some examples of these types of jobs include positions with the military and the police and fire departments. However, some states have stopped offering pension plans to new employees. Large private corporate employers may also offer pension benefits, but it's not as common as it used to be. Ask a prospective employer whether they offer a pension and what you need to do to become eligible for it. It's important to note that 401(k) benefits are not the same as a pension. With a 401(k), you must contribute your own money to the plan, and the employer may make a matching contribution and/or a profit-sharing contribution. With a 401(k) plan, you are responsible for the decisions about the money inside of the plan. If your employer offers a 401(k) but not a pension, one possibility is to use your 401(k) money to create your own pension benefit when you retire. Creating Your Own Pension When you retire, you can use your own savings, such as money in a 401(k) plan or IRA, or savings that are not in a retirement plan, to buy an immediate annuity, which would pay you a guaranteed income for the rest of your life. In this way, you can create your own pension. Delaying the start date of when you begin your Social Security benefits can also be a way for you to create a larger stream of retirement income for yourself. For example, if you retire at 66, you can use savings to buy an annuity that provides guaranteed income for four years. You can then begin receiving your Social Security benefits at age 70, which would pay out a much larger amount than if you were to begin taking them at age 66. That's because your social security contributions would continue to grow, at approximately 8% per year, until age 70. In addition to the amount that has accumulated in your social security account, benefits are also determined based on life expectancy. Thus, the older you are before taking social security, the higher your payment will be. Pensions and Your Spouse If you're married, consider your spouse when you make pension choices, whether you get a pension through an employer or create your own. You can choose whether your pension will pay out a benefit for your life only, or you can go with a joint/survivor option, which will pay out a monthly amount for as long as either of you or your spouse lives. There are many options available to you as you plan your retirement, and a pension is only one of those options. If you want to find out more about the opportunities available to you, it's wise to consult a financial planner for help. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. National Institute on Retirement Security. "New Case Studies Find Increased Taxpayer Costs When States Move Employees Out of Pension Plans."