We’ve been writing about why it’s important to have GUARANTEED INCOME FOR LIFE the last weeks. Of course you already know this, that’s why you’re a client, and at our March 8th special client-only lunch seminar we will discuss this more elaborately. Did you know that for years most everybody had guaranteed income for life once they hit retirement? We’re not talking about a plan like Bernie Sanders or Hillary is proposing. Most workers had a pension through their employer.

A highly educated pension manager who was independent of the company managed the pension plan for the company and from day one workers knew that if they worked a specified set of years they would have specified income for the rest of their lives. This allowed people to not stress about retirement and it allowed them to live anxiety free. This defined benefit plan worked well because it gave security, and this worked well for millions of Americans.

Then something changed in 1974. Like all good things the government messed it up. Then the government tried to paint itself as the hero for coming up with the solution to the mess it created. Ironic isn’t it?

During the 1970s Wall Street began facing many challenges. Stock market investors were losing money as bankruptcies became prevalent. Businesses had contracted to the point that consumers were losing confidence in Wall Street. As time went on Wall Street became desperate for a solution. It didn’t take Congress long to act, and how they responded shaped how most people invest their savings to this day. Discounted brokerage fees and no-load mutual funds were created.

That wasn’t enough for Wall Street… They really wanted the investing public to regain trust, and lobbying Congress again was the answer. The DIY (Do It Yourself) retirement program began in 1974. Wall Street lobbyists had Congress change retirement tax laws and began in haste a new program, the Employee Retirement Income Security Act (ERISA).

President Gerald Ford signing ERISA into law 

President Gerald Ford signing ERISA into law 

One of the biggest changes to old style pension plans that created security and stability (mentioned above) was that an employee could receive a retirement benefit without the need to work most of their life for that same employer. This created an impasse for pension managers because they could no longer forecast over a hundred-year period as they could before. When anyone could take a benefit without due process, this created unfixable problems for pension funds. Safety, security and guarantees were whisked away so that Wall Street could make another buck.

The other problem ERISA created was the Do It Yourself (DIY) retirement planning known as an Individual Retirement Account (IRA). In order for Congress to get Americans to buy into the DIY IRA system, they offered a $1,500 tax deduction for opening an IRA account. This new system required many explanations, but investors were left on their own in figuring it out.

At TreeceCo our method of retirement planning is akin to the old style system that allows for safety, security, and GUARANTEED INCOME FOR LIFE. No, you don’t have to have years to create the stabilized income we are explaining here. We can give you a contract on your money, guaranteed performance of your money, and peace of mind. And you can create GUARANTEED INCOME FOR LIFE if you haven’t already. There’s nothing wrong with DIY projects but you’ve been wise in that you’ve understood when you need assistance. At our March 8th special client-only lunch seminar we will explain these things further.