Today’s retirement dreams have been jeopardized.  After the Great Depression in the 1930’s until the mid-1970’s, America’s retirement system was sound and worked great. That generation of retirees had access to defined benefit pension plans and were ensured an income for as long as they were alive.  But over the years following the 70’s, pension plans gave way to mandatory 401k’s. This evolution inadvertently summoned everyday mom and pop workers to do the job of a full time pension fund manager, by forcing them to manage their own retirement money.  Fast forward to 2011.  Over 10,000 baby boomers are hitting age 65 every single day for the next decade.  And the majority of them are unprepared and underfunded to weather out retirement without running out of money.  With the pensions of old almost completely extinct, where can baby boomers and retirees turn for a contractually guaranteed lifetime income stream?

What is a Private Pension?

Over the past decade, the financial markets have gone through a myriad of ups and downs,leaving most investors on edge - especially those who are approaching their retirement years. This can be a tragedy that brings to light one of the biggest fears an investor faces – running out of money in retirement.  With only a small portion of working Americans fortunate to have a true pension in place, what will the rest of us do to ensure we have enough money to last through retirement?  Will we just keep praying that our 401(k)’scan get us there?  Click The Truth about 401k’s to read more.

While many have seen their hard earned savings disappear and are leery about jumping back into the “fire” with what they have left, there are options available that can help investors achieve their financial goals, while also offering peace of mind for concerns such as outliving assets and retirement income keeping up with inflation.  For today’s baby boomer and retiree, contractual lifetime income should be their number one priority.

 

A Better Retirement Planning Option

Even though the all-time low interest rates coupled with the volatile stock market make it seem like there are no options, that couldn’t be farther from the truth.  Today, investors have more options available to them that can put them back in the retirement driver’s seat. One choice that can provide the “best of all worlds” is the private pension plan. With this financial vehicle, investors can receive a lifetime income that starts either immediately upon a lump sum deposit, or at some time in the future.

These financial products can offer their holders a unique combination of benefits that can provide tax deferred growth of funds within the account, the potential for a nice return based on indexed interest, and an amount of protection for the investor’s retirement assets and income. These private pensions even give the owner the ability to turn their income on or off at their command. Moreover, some of these private pensions enable the owner to achieve 7%guaranteed returns before turning on contractual lifetime income!

The private pension plan can also offer their holders interest earnings potential that is linked to the stock market, yet it will completely avoid market downturns. This savings vehicle is very appealing to those who understand the long-term benefit of investing in equities but are not comfortable with the volatility and potential losses that are a common part of investing.

These products were created with the purpose of offering a return that is somewhere between stock market gains and basic savings instruments. With the typically higher returns than other conservative options, and coupled with the safety of principal that they can offer, private pensions have become a very popular choice – especially for retirees and those who are approaching retirement.