Our Retirement Income Plans

Why do we need Retirement Income Plans now? We have entered a perfect storm that threatens our planned retirement cruise. There are three elements that have caused this storm. First, compared to previous generations, we are living longer than ever, on average 20 or more years after age 65. We are likely to need retirement income for 20 or 30 years. Second, the past 30 years has seen a significant decrease in corporate defined benefit pension plans for their workers. These plans provided retirees with a lifetime monthly income payments that could even extend to spouses. The most common situation now is for employees to have only a 401k plan that does not guarantee a monthly income at retirement. Last, because of the Great Recession, we are now in an era where interest rates have sunk to the bottom of the ocean. As of 11-13-14 certificate annual percentage rates are ranging between .25% annually to around 1%. Ten year government bonds are at 2.35%. How can one generate enough retirement income when rates are this low? We create retirement income plans that use multiple sources for generating retirement income. Most investors are not familiar with these sources because they have been investing for growth all of their working lives. To find out what these sources are and how we create our retirement income plans, please contact Brandon.smith@lpl.com or 805-987-8938.