As I have said time and time again, just because you are contributing to your company’s pension fund and the social security, does not mean that you will have enough funds saved for retirement. I was going through the net, and I came across the following article that was published by Jennifer Wirt, where she explains how a study was done and it was found out that having a 401k and pension plan was not enough to meet the income a person would require to live on during their retirement. Therefore, it would be prudent for a person to set up a second or additional source of income to supplement income from these two sources.
Over this last weekend (November 22, 2008) I heard a radio (NPR) program discussing defined benefit plans (pension plans) and 401k plans. I learned something I didn’t know. 401k plans were developed for executives who already had pension plans. It was a way for them to save additional retirement money, and shelter it from taxes. So, these executives had both a pension plan and a 401k savings plan. Prosperous indeed.
According to this program, Corporate America enthusiastically adopted 401k plans in lieu of Pension Plans. It saves them huge amounts of money. Unfortunately, it hasn’t worked out as well for their employees. The NPR program cited a study that compared living on a pension plan and social security, with living on proceeds from a 401k and social security. They found that it is possible to live on a pension plan and social security. And, that it is not possible to live on a 401k and social security.
It seems that there are problems with both employees and corporations (employers), and 401ks. Employees often take the money out before they are supposed to. They will often save only $100,000 which does not allow returns high enough to support them in retirement. Employers often limit the choices employees have in their plans. And they don’t necessarily make contributions to the plan. In addition, the stock market hasn’t been very cooperative.
At the conclusion of this program they pointed out that both 401k and 403b plans have been decimated during the recent market volatility. This isn’t really news, but it is depressing all the same. What can these investors do?
There is another option. Create another source of income. Multiple sources of income can bring back prosperity during these troubled times. A home-based network marketing business will allow you to start the business, and build the business part-time while you continue to work. What you build can include residual income–income that pays you for work already done. That’s a little like the pension plan discussed above.
These businesses provide training and support. They are cooperative. They allow you to care about people. And, care for people. Find a business you can embrace. Doing what you enjoy, and allows you to be joyful can mean unexpected good will take place. The businesses have low overhead–a separate “brick and mortar” building isn’t necessary. They have minimal labor requirements, the fewer personnel the better. They are portable, the business goes where you, your phone and/or laptop goes.
You may be considering purchasing a franchise. These businesses are far more affordable than buying a franchise. Many can be started for less than $50. Franchises are hundreds of thousands of dollars. For added security look for a network marketing business in an area of the economy that is growing. Health and wellness are predicted by economists to grow to a $1 trillion-dollar industry. People are looking for preventive measures to stay healthy.
Don’t be a victim of the stock market volatility. Make a different choice for yourself. Reclaim your prosperity! Give yourself the chance to have a stellar retirement!