The Differences between Retirement and Pension is given here. Confusing the terms retirement and pension in simple. Depending on the laws of different countries they may be different.
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Retirement
A retirement is an administrative act through which an active worker passes into a passive or inactive situation, either by his own decision, by reaching the maximum age, or by chronic illness or disability.
Because of this, you will get a monetary benefit for the rest of your life. The legislation of each country regulates the conditions regarding retirements.
To alleviate the loss of income that comes from the termination of work, the retiree is granted a monthly income or economic benefit that only ceases with his death. The value of this benefit will depend on your performance at work, amount and amount of contributions, and more.
To access retirement, age, or disability requirements must be met.
There are two types of retirements_
Contributive: It is one where the retirement system is financed by the contributions made to the system by the workers themselves or their employers
Non-Contributive: It is that received by workers who did not make contributions to the system and who cannot benefit from the other modality.
Pension
It is also known as insurance or subsidy as it is related to social security. It is a payment that a person receives temporarily or for life in case of being in a delicate situation established by the law of the country that makes them the creditor of certain financial compensation.
The pension is usually understood as social insurance against occupational risks and against old age as well as the consequences caused by a work accident or military actions.
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Differences between Retirement and Pension
- Retirement is an economic income that a worker receives when reaching the age established by his country to enter into work inactivity or when he is the victim of an accident that leaves him disabled. It is for life.
- A pension is a payment or rent made by the State or a private organization to people who have reached old age, have suffered an accident, or are the survivors of a worker or soldier wounded or killed in the war. It is related to social security.
