PICKLEBALL DIVIDES A RETIREMENT COMMUNITY & HIGHLIGHTS THE STRAIN OF NOT HAVING ENOUGH RETIREMENT INCOME

PICKLEBALL DIVIDES A RETIREMENT COMMUNITY & HIGHLIGHTS THE STRAIN OF NOT HAVING ENOUGH RETIREMENT INCOME

By:  David I Gensler, MSPA, MAAA, EA

A recent article in the Wall Street Journal (WSJ) highlighted the fact that many middle-class boomers are financially unprepared for their “golden years” and how this led to social tensions within a specific retirement community. Read More

SAVING FOR YOUR KIDS’ COLLEGE vs. SAVING FOR RETIREMENT- IF YOU LAG BEHIND CAN YOU CATCH UP AFTER YOU BECOME EMPTY NESTERS?

 

When it comes to growing your retirement nest egg, conventional wisdom calls for us to start early and then to save 10% – 15% of your income. That’s great but for many of us, totally unrealistic. The day to day expenses of the child rearing years, coupled with the need to save for college can cause many of us to not save enough for retirement. A recent article in the Wall Street Journal (WSJ) suggests that all is not lost. By following a certain strategy and sticking to that plan, empty nesters can make up for the years where not enough was set aside for retirement. I do have some questions about their assumptions, but we will get to that later. Read More

Has It Really Been Forty Years?

By: David I Gensler, MSPA, MAAA, EA

Madison Pension Services first opened its doors on July 1, 1978. Being an actuary, it is not hard to figure out that July 1, 2018 will represent our fortieth year in business. Forty years is a long time and it has gone by in the blink of an eye. For you millennials and Gen Xers, let’s take a look back at what life was like in 1978. Read More

What People Fear the Most

By: David I Gensler, MSPA, MAAA, EA

When I looked at various top ten lists of what people fear the most, public speaking was invariably number one. Also making the top ten list was a fear of heights, flying, snakes, spiders, zombies and clowns. But I noticed that a new fear had emerged. And as baby boomers age out of the work force, it seemed to be moving up the list rather rapidly (although I doubt that it will ever replace the fear of public speaking as number one). That fear is the very real concern about running out of money in retirement. Read More

Business Owners: Find Your Best Retirement Plan—Part 2

By the Madison Pension Editorial Team

As we addressed in Part 1, your options for implementing a retirement plan for yourself and your employees extends beyond the typical 401(k) plan. Retirement plan sponsors should investigate popular retirement vehicles, even to supplement their 401(k) plans, to ensure they are maximizing benefits for participants based on the unique needs of their organizations.

In Part 1, we covered a defined benefit (DB)/defined contribution (DC) combo plan, which can help businesses lower their income taxes and make up for lost time in putting aside money for retirement. In this segment, we will highlight one particular DB plan known as a cash balance plan, which also contains many elements of a DC plan. A few of its elements also closely resemble those of a 401(k) plan. If this all sounds a bit confusing, read on to see how it all irons out.

While cash balance plans are the fastest-growing retirement plans in the country, only about 10,000 such plans exist in the United States, compared to about 500,000 401(k) plans.  Yet, cash balance plans grew in popularity by around 500 percent during the 2001-2011 decade. Why? These plans allow owners of small firms (50 or fewer employees) to avail themselves of considerably higher tax-deductible contribution limits than 401(k) plans allow.

Let’s look at how cash balance plans compare to other types of plans noted above:

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Cash Balance Plans: Putting More Tax-Deferred Money Away for Retirement

By David Gensler, President

Cash balance plans are the fastest-growing retirement plan in the country—flooding a market saturated with 401(k) profit-sharing plans, which are on a flat to slightly downward trajectory. According to market research, cash balance plans—hybrids of defined benefit (DB) and defined contribution (DC) plans—increased in number by 500 percent during the 10-year period ending in 2011.

So, what’s the big deal with cash balance plans? In a nutshell, they offer business owners the opportunity to avail themselves of considerably higher tax deductible contribution limits compared to 401(k) plans, reducing their tax bill and allowing them to accumulate more retirement wealth at an accelerated rate.

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