How to Retire with Enough Money

“Facing the Facts”

Many people are fearful about being able to afford retirement. Even those with pensions, paid-for houses and Social Security benefits are apprehensive. Though individual responsibility is an integral part of retirement planning, the problem of not having enough money goes beyond personal accountability. Most future retirees face an economic climate hostile to their situation.

For decades, Americans depended on traditional pension plans that guaranteed specific retirement payouts. Employees contributed an exact dollar amount from each paycheck – in some cases, employers funded the entire amount – and their companies placed the money in a professionally managed fund. Having pension fund payouts plus Social Security benefits enabled many people to live comfortably in retirement with a minimum of stress.

But in the late 1970s, an accountant discovered a loophole – subsection 401k – in the tax code that eventually led the IRS to approve a new type of retirement fund. Though this provision originally was intended to cover the unique demands of highly paid executives who wanted to avoid paying taxes on deferred income, companies tried selling the ...