Cheat Sheet Q & A:
Topic: Pension buyouts
My husband called me this morning and told me what you said about pensions. That you should never leave your money behind...My husband worked for (a stable company) for 18 years, he left 5 years ago to run his own business. A few months ago he was offered a buy out of his pension at about $80,000- $100,000. My husband did not take it. But after listening to you he feels he might have made a mistake. So, he would like to know if it is offered again what would you suggest and then what do you do with it?
Bottom Line: When I recently discussed the topic of pensions, which was brought about by the
I’ll refer to pensions as “legalized fraud”. Promises are made about income and benefits that will be provided in future years without any certainty that the entity that’s making the promise will be solvent and capable of meeting those promises. To be clear - I always want everyone who has earned a pension to receive what they were promised and are entitled to, but it’s important to understand that promises are frequently broken in today’s world. Whether it’s future generations with Social Security, city employees in
Accepting a buyout after completing a career with a company is a bit of a different consideration. Each buyout would need to be viewed through a different prism. Among the considerations:
For these reasons I can’t provide a complete answer to your specific question. I can tell you that the company your husband is due a pension from is financially sound for the foreseeable future and it’s likely that they’ll be able to meet their pension obligations for years to come.
If you have a topic or question you’d like me to address email me: firstname.lastname@example.org
Don’t make the mistake the average homeowner is making when listing a home:
Bottom Line: According to the July data from Realtor.com the average list price in July was 5.3% higher year over year. Here’s the problem, or mistake, that’s being made. The average home price appreciation year over year coming out of June was 11.9%. So… At a minimum the average home owner who listed a home for sale in July underpriced their home by 6.6%. That means that even if the average home seller received fully asking price they’d leave and average of $15,000+ on the table!
Its super important that prior to listing your home for sale – you know what the current local market conditions are in your area… Even more important… Ensure your real-estate agent does as well. Because of the rapid rise of local real-estate prices in our area, with some communities seeing 30%+ appreciation year over year, you could lose out on a much bigger amount. Even if you only under-listed your home price by the national average, 6.6%, the average home seller in our area would lose out on $18,150! That’s certainly worth doing your diligence when picking an agent and pricing.
Don't buy Apple products right now unless you have too...:
Bottom line: Along with the iPhone announcement info earlier in the week I mentioned we should soon have an update with regard to the iPad as week. Indeed that’s the case. We know to expect an iPhone announcement September 10th and two new iPhones to be available at that time but it’s also becoming clear that a next generaation iPad will be coming in October.
The real takeaway is that we’re getting ready to see Apple’s biggest product upgrade cycle in a couple of years. It’s doesn’t make sense to pay full price for devices that will be outdated in a month to two months. If you do want the current models wait for the prices to come down once the new products are released. If you’re willing to pay full price, you certainly will be better served by being a little patient. Among the new products to expect within the next two months:
True wealth usually comes from smart investments:
Bottom Line: The
Often we people evaluate the wealthy they look at the salaries they earn. Frequently the amount of money earned by
Only 39 cents of every dollar earned by the top 1% of income earners comes from a paycheck. That’s right less than 40% of income of the top income earners is from their job. Why? How? They’re successful at making their money work for them. The lesson is that saving and investing wisely is the real key to wealth.
I’ve previously outlined how even the average American making the average income can be a millionaire within 25 years. It goes hand in hand with this story. Saving and investing as early as possible is the real key to long term financial success. Imagine if your investments accounted for 61% of your income. You’d likely be in a commanding financial position right? Whatever your income level is you should strive to follow the path of the wealthiest. If the majority of your income could be produced by the time you’re ready to retire, you’ll be set for success, especially with Social Security and any other retirement income to supplement your income. The key to real wealth isn’t today’s income – it’s what you’ve done with your income over the course of your life.
The new $7 billion dollar tax that’s set to hit million of Americans next year:
Bottom Line: Yesterday the CBO (Congressional Budget Office) calculated how much in additional taxes would have to be paid by Americans that don’t currently have health Insurance. The total would be about $7 billion dollars from 6 million Americans. They also outlined clearly just how much the tax would be per person and family.
For 2014 the taxes for non-compliance of the Affordable Care Act are:
But that number will rapidly grow. By 2015 the taxes balloon to:
And by 2016:
In other words the taxes levied by the Affordable Care Act are set to be about $7 billion in 2014, $23 billion in 2015 and $50+ billion by 2016.