Pensions

As can be seen from yesterday’s example, an individual desiring $4,000 of monthly net income in retirement can need in excess of a $1,000,000 retirement portfolio to supplement his or her Social Security and pension income. As can be verified by this calculation, there are many factors to determining the retirement “nest egg” that must
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I find when meeting with individuals for the first time that they typically have no idea how much they will need to be able to retire. The typical answer of $1 million is absolutely worthless since everyone has different income requirements and different income sources that must be added into the equation when determining when
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Private-sector pensions are a vanishing breed. Defined-benefit pension plans are being replaced by defined-contribution plans such as 401(k)s, mainly because pension plans are costly for employers to fund and maintain. As a result, employers are beginning to offer lump-sum payout options to their retirees to replace the traditional lifetime monthly payments of a pension. Once
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Classically, a pension is a retirement plan where a company or governmental entity sets aside contributions for its employees’ future retirement needs. These funds are invested to increase the available money pool used to meet those future obligations. But over the past 50 years, the definition of pension has expanded to include retirement plans where
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The Employee Retirement Income Security Act (ERISA) was enacted in 1974 primarily to set standards for private pension programs. Prior to ERISA, the management of some large pension funds had been indulging in questionable investments and loans. ERISA was enacted to make sure that pensioners get the benefits that they deserve from their fund contributions.
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Benefits for Social Security and traditional pensions are apportioned very differently. With traditional Social Security, your benefits are calculated based on your work record and supported by taxes removed from your salary during the course of your working life. With pensions, the company or government entity you worked for puts aside money in a fund
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Retirement is approaching. Do you have a comprehensive overview of your retirement funds and how you will manage them when you actually do retire? A surprising number of people do not know much about their retirement funds other than that they exist. Some don’t even realize how many sources of retirement funds they have. This
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