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