A private pension is an alternative to retirees who want to supplement their income. A private pension usually involves contributions to an IRA or other type of savings plan. Other types of pensions include:

• An employer sponsored pension such as a 401K program. While employees may contribute to this plan, the employer may also match those contributions. The plan is administered through the company.
• A government pension. Teachers, police officers and veterans will receive retirement benefits from the federal or state government based on their years of service.
• Social Security. While this is not really a pension, it is money that retirees collect to help them survive their senior years.

Contributions are made to a private pension over the course of a person's lifetime. Since most of the contributions are tax deductible, the Internal Revenue Service has limited how much can be saved. In 2009, that limit was $16,500.