Making a Smart Decision about Pensions for Your Future
Discover the key factors influencing pension decisions, including deal breakers and essential math calculations. Learn why only 4% of employers offer pensions and how to assess your pension options for a secure retirement.
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Presentation Transcript
CONGRATULATIONS! Slide Title Only 4% of employers offer a pension. Pensions are an endangered species compared to the 1980 s when 60% of private sector workers had pensions. Math vs. Deal Breakers
Slide Title First, let s talk about Deal Breakers.
Deal Breaker #1 INHERITANCE If my spouse and I die, I would HATE for my kids to lose their inheritance. Slide Title LUMP SUM MONTHLY
Deal Breaker #2 Slide Title NERVOUS ABOUT INVESTING I am so scared of investing, if I took the lump sum, it would be under my mattress. LUMP SUM MONTHLY
Deal Breaker #3 Slide Title CUT TIES WITH EMPLOYER I am done depending on my employer for my income LUMP SUM MONTHLY
Deal Breaker #4 SPENDTHRIFT Slide Title I worry I ll spend through the lump sum too quickly. LUMP SUM MONTHLY
Slide Title If you don t have strong deal breakers, you ll want to consider the math.
Lets use a real-life scenario. Slide Title Here is a real retiree s pension. Of course, using a fake name, Rochelle.
Bad Math No. 1 Slide Title The mistake: Ignoring the effects of growth on your lump sum.
Bad Math No. 2 Slide Title The mistake: Some of the payment is your principal. It is not all interest.
Slide Title The Right Math Finding your Required Rate of Return
Required Rate of Slide Title Return (RRR) For each life expectancy age, you can see the RRR to duplicate the monthly benefit.
RRR Slide Title Chosen Life Expectancy AGE 90 If she earns 4.08% on the $356,000 lump sum, her $1,800 per month pension will last exactly to 90 years old.
Slide TitleInheritance Chosen Life Expectancy AGE 90 If she earns 6% on the $356,000 lump sum, she will have $250,128.11 leftover at age 90 to leave as an inheritance.
Slide TitleInflation Your pension of $1,800 per month will be worth this much spending power in the future.
The Pension Analysis Slide Title
Questions & Answers 19 Phone: 801.566.5058 Website: CapitaFinancialNetwork.com Email: info@capitamail.com Podcast & Additional Education: TheFinancialCall.com Capita Financial Network is an SEC registered investment adviser. Registration with the SEC does not imply certain training or skill. Capita Financial Network and its representatives do not provide tax or legal advice. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. This material is provided for general information and education purposes based on provided and available information and from sources believed to be reliable. Past performance is no guarantee of future results.
