Money Matters (November 2016)
By Chuck Dudley
REMEMBER WHEN EVERYONE HAD A PENSION?
Well, almost everyone. A pension is defined as: “a regular payment made during a person’s retirement from an investment fund to which that person or their employer has contributed during their working life.”
In the olden days, pensions were funded by the company you worked for. Money was contributed, a return on that money was added, and the distribution at retirement was some function of final salary. It was a good idea, but it became very expensive. At least the company ownership thought so.
Over the years, most companies ditched their pension plans for the 401k format. This meant that the risk for retirement was shifted from the company to the individual. And that has lead to the retirement quandary we have today.
Very simply, a pension is just a distribution of assets and earnings on a pot of money that has been accumulated. How you want the distribution of those funds for retirement is dependent on many factors.
How long will you live? Do you have a spouse to consider taking care of? Assisted living, estate planning, and legacy desires all contribute to the quandary about pension decisions.
IT’S OUR RESPONSIBILITY
So true. No one can create a retirement fund except us. There are no company sponsored pensions anymore. They do help with 401k contributions, but it just isn’t enough.
Here is where discipline and forward thinking are prime character traits. From the day we begin working, we should always have an eye toward that retirement date. As my generation has learned, it’s here before we knew what happened.
Time and money can solve a lot of issues. But you must commit to a strategy and then develop a plan.
There is no defining answer except for commitment to the plan.
There are many ways to accumulate funds: 401ks, IRAs, investment in securities, investment in real estate, investment in insurance, investment in annuities.
Somewhere in this mix is where we all find ourselves.
How you structure it is the dilemma.
YOU CAN CREATE YOUR OWN PENSION!
Yes you can! Creating a guaranteed stream of income for your life can be done. Hedging your traditional investments can also be done.
In past newsletters we have written about ‘Paychex and Playchex’. Structuring your retirement distributions for ‘Paychex’ allows you to pay your obligations and not worry about that part of your finances as you age.
Having retirement distributions for ‘Playchex’ will allow you to enjoy the things you want to do in retirement. Travel, entertain, family……….all things that are important to YOU.
Counseling with families on their retirement dreams is what we do.
Helping you create your OWN pension, so you can live in comfort and security, is how we do it.
If you really want to make sure you have right ideas for moving forward in a positive manner, we will listen. We’ve been able to help families and businesses learn to use money wisely, and we’d like to help you too. We would be honored to visit with you about how to help you and your business. My number is 501-318-0010, or you can send me an email at firstname.lastname@example.org.
An hour of your time spent analyzing your situation might make a lifetime of difference
Arkansas Insurance Producer # 1005698
That’s all for this month! If you’ve enjoyed what you read, please share Money Matters with a friend, family member or loved one.