Lesson Four
How to gain the ultimate retirement protection
Retirement protection
is one of the success guidelines we study at SuccessGuidelines.com.
This is vital because we all need the ultimate retirement protection
which is no need for a pension at all.
When you read the
facts below about your retirement protection, you may shudder.
But there is a solution to the pension protection problem we all
face in this lesson below.
Think about how
most people live in the future. This is the Western way. In school
they cannot wait to finish and get a job. Then work starts and
they soon want more. They want to be the boss. Finally they work
their way to the top. Then they think about when they can retire
and stop. At the end, off the tread wheel, finished with the rat
race that wonderful time comes when they can finally retire.
I do not agree
with this linear mode of thought, but this is the web into which
most people are caught. And there is a degree of comfort belonging
to a society and succeeding with and having retirement protection
from its rules.
Yet how much retirement
protection do we really have?
Consider an article
in USA Today which read:
"Federal Reserve
Chairman Alan Greenspan warned Thursday that the country faced
abrupt and painful adjustments down the line unless lawmakers
soon address the enormous strains placed on Social Security
and Medicare by the aging baby boomers.
"Greenspan
was chairman of a 1983 commission that resolved a previous Social
Security crisis. He repeated his calls to change the inflation
index used in calculating benefits and suggested that another
increase in the retirement age might be needed. "The aging
of the population in the United States makes our Social Security
and Medicare system unsustainable in the long run, short of major
increases in immigration rates, a dramatic acceleration in productivity
well beyond historical experience, or a significant increase
in the age of eligibility or the use of general references to
fund benefits.
"If there
are no changes, the programs will overwhelm the federal budget.
"We need to
act soon or baby boomers and their children will be harmed.
"Large increases
in payroll taxes or reduction in program benefits could alter
company hiring practices and employee work and savings patterns.
"Here is another
article in the same USA Today about the US Airways Pension:
"US Airways
targets pilot's pension plan. With 10 months left in a 32 year
flying career, USA Airways Capt. Joe Graham suddenly faces
a retirement shock. Instead of the $175,000-ayear pension he'd
counted on it could be $90,000, if he is lucky or even much
less (as little as $28,000 a year).
"US Airways
is asking a federal bankruptcy judge to terminate a pilot's pension
plan, freeing the company from $1.7 billion in pension obligations
and possibly clearing the way for its emergence from reorganization
in late March.
"If the plan
is terminated, pilots would receive $28,400 a year from the Pension
Benefit Guaranty Corp. which insures business pension plans.
While terminating the plan would save thousands of jobs at
US Airways, it would be a staggering blow for veteran pilots
like Graham. He has three children to put through college and
when he turns 60 in December he'll hit mandatory retirement
age for airline pilots. The prospect of losing most of his
pension comes on top of pay cuts that he says have cut his
salary 30% from $275,000 a year. 'You can rationalize these
pay cuts,' he says. 'You can cut your lifestyle back, you cannot
get a new car, you can cut back on travel, but by God they're
not going to cut me loose at 60 unable to fly at $28,000 a
year with three kids."
"Pilots were
especially stung by the fact that US Airways paid $35 million
in advance pension payments to former chairman Stephen Wolf,
CEO Rakesh Ganngwal and former general counsel, Lawrence Nagin,
before its Chapter 11 filing.
"The next day's
paper outlined that the judge did in fact allow US Airways to
renege on the pension.
Reduced pension
and Social Security. Is this retirement protection?
But the bad news
does not stop here.
The U.S. budget
deficit seems to grow each year. This will put severe downwards
pressure on the U.S. dollar and weaken the government's ability
to keep Social Security on track.
In other words,
we cannot totally rely on Social Security or any pension plan
for our retirement protection. History is littered with social
plans that have left those who grow old out in the cold.
There is only one
true form of wealth and retirement protection, "the ability
to serve". The only way to assure that others will have
what you want and need is to have the ability to create things
they want. Wealth can never be static. Wealth is energy and must
continually move forward and evolve. Successful service requires
bringing together three natural powers: a meaningful cause we
have a passion for, a financial balance and a focus that allows
our cause to benefit others. A business has to serve its customer,
its workers and be profitable.
This is why having
your own business makes so much sense in these tumultuous times.
Your own business is the ultimate retirement protection. Technology
makes your own business easier. Small businesses are easier to
buy today than ever before and there is no greater way to gain
security, freedom, wealth and retirement protection.
Gary Scott
