Retirement is your responsibility and problem.
Defined benefit plans have lost most of their assets.
There are ways defined benefit plans can be terminated.
This can be devastating as you approach retirement age
realizing all to most of your savings are lost forever.
Are you sure you are preparing for your retirement?
Despite what you have have heard, defined benefit plans are very few today due to the
may ways employers or their agents have failed to pay attention to the management of
funds paid in by employees and sometimes employers resulting in significant loss of
assets or the entire fund itself. Promises of industry or government programs to
reimburse employees for such losses have not proven to be realistic. Protect yourself.
Retirement programs from various providers can be difficult to evaluate as there is risk
in calculating what you need to save to be protected against the future. A member of
your family may be stricken by Alzheimer's and need care. Medicare and Social Security
will only pay for part of these expenses which can easily run above $8,000 per month
per person. Money drawn from your retirement for these most likely will be taxable.
Government will require you begin withdrawing funds from certain retirement accounts
before you are needing the money adding to your tax liabilities in retirement. Starting
retirement was once a straightforward process and how it is highly complex with many
opportunities to make mistakes that can be very costly.
There are a number of companies and individuals who can offer retirement planning
and have a fee for their services. Because of changing economic conditions and laws,
these plans need to be reviewed periodically to see if you are still on target to achieve
the objectives and hopes originally mapped out for your needs.
AARP is a good source for information to understand the landscape but can only offer
this on a broad basis which covers a wide range of groups from various income levels,
saving habits, investment approaches and ability to save money for retirement.
Social Security should not be considered as your Retirement Plan due to the extensive
debt owed to it by the US Government. The "Social Security Lock Box" may have a lock
but the bottom of the box is missing.
Vanguard Investments is another good source for information. What makes Vanguard
different is this organization is owned by their investors; their employers work for those
investing with them and not by a large holding company or corporation. This allows
them the flexibility to offer services at lower rates. Brokerage companies today make a
selling point about stock trades for only $7.00 Vanguard's rates can be as low as $2.00
depending on the total investments you have with them. Their indexed funds are often
in the top performing funds from good management and low rates for their services.
You are, of course, able to evaluate any organization of your choice to find somewhere
that can help you meet your objectives, understand the impact of your choices, and
start your savings. But it all starts with you taking that first step.
Tips in your planning from an amature:
1. Do you feel comfortable with the people you are handing money over to?
Are they primarily focused on their larger corporate and high wealth clients or
are they serving all clients on an equal footing?
2. Are the offerings they have in terms of types of accounts and investment options
something you feel comfortable with. Remember, these will be most if not nearly
all of your life's savings.
3. Are you prepared to maintain a continued contribution to grow your funds to build
a larger retirement?