|Variable revenue and fixed expenses
In any given ten year period, the stock market may be up a lot four years, down a lot four years and average two years. The problem is that if you are retired, you need at least the same money to live every year. But almost half the time, the stock market will produce little or no return on your money, forcing you to cut back expenses or God forbid, to dip into your capital base for spending money. Over forty years of retirement, you will need to make this gut wrenching decision over and over again as you try to stretch your retirement savings over a lifetime – a lifetime where you don’t know the end point.
Cutting back your spending in retirement to make your finances work may leave you fighting with a spouse – not a pleasant way to spend your retirement years. After all, didn’t you work for 35 years to enjoy retirement?
Simply put, the stock market is too volatile for you to be able to count on a steady income in retirement.
To take this one step further, many are saying that the stock market in 2013 is no longer like the stock markets in the past. Today, computerized trading, hedge funds and day traders have made the market more choppy than ever, making it even harder to make a return on your money. Thirty years ago, you could work for one company your entire career, invest in the company stock and ideally retire with a million dollars the day you retire. Now only a fool would put so much money into a single stock when the risk is so great that your company could become the next Nortel, AIG or British Petroleum. There is no such thing as a blue chip security anymore. It is harder than it has ever been to make money in the stock market – this creates an even more stressful retirement financial picture.
A Pension is a Better Option
Your pension is deposited to your monthly bank account each month without missing a month – ever. You know exactly how much money you will always get, allowing you, or you and your family to plan vacations and all other spending ahead of time – money for fun stuff and for basics without worry or argument – the way retirement should be!
That’s where a pension can help you. A pension provides a guaranteed cash flow for you with no stock market investing required. The pension you will receive will never decline or face uncertainty when the global stock markets meltdown – something that has happened almost every five years in the last fifty years. And it is sure to happen again.