A pension is a type of retirement plan that provides individuals with a steady income after they stop working. It is typically funded by employers, employees, or both, and is designed to help people maintain their standard of living in retirement. Pensions can be defined benefit plans, which guarantee a specific payout, or defined contribution plans, where the payout depends on investment performance. When individuals retire, they receive regular payments from their pension plan, which can last for the rest of their lives. This financial support is crucial for many retirees, as it helps cover living expenses, healthcare costs, and other needs. Understanding how pensions work is important for planning a secure financial future.