I turned 55 this year. It seems that with each birthday I think a little more and plan for retirement. I’ve long since decided that Social Security will not meet my retirement needs (and it was never intended). I belong to a smaller and smaller group that is still covered by a defined benefit Retirement benefitsalthough recently it was frozen and closed to new employees. How should a pension fund flow into my retirement?

A question many aging employees ask themselves is “Can you expect to receive your monthly pension?” Many pension plans are underfunded. The law requires the company to have on hand most of the money owed to employees. As long as the company is viable, it is responsible for making up for any shortfalls in its retirement plan.

If the plan is less than 80% funded, it limits the options for employees. For example, if the plan is less than 80% funded, you will not be able to use the benefit as a full lump sum. and your company may be forced to freeze the plan if it is less than 60% funded. Freezing the plan may mean that new employees are no longer allowed to join and current participants will no longer receive any additional benefits.

A strange fact for those on a retirement plan is that you are more likely to lose your job than your retirement. Since the company is responsible for any deficits in its retirement plan, it may choose to cut costs by using staff to fund the retirement plan deficit.

Until the Delta Pension ran into problems, I (naively) assumed that what I owed from my company’s retirement plan was an automatic entitlement. However, events have shown that if you go wrong, you might get only a small fraction of what was promised in a glossy HR brochure.

While you are pretty sure of the accrued benefits, you cannot rely on future ones. When the company I work for froze our pension fund, my planned benefits were cut in half. Your goal should be to save enough for retirement to bridge the gap between your estimated expenses and what you earned in your retirement.

You should never rely on just one source of income. You should have a backup plan and develop multiple sources of retirement income. My retirement plan depends primarily on what I’ve invested and controlled, such as: B. my 401 (k) and taxable portfolio. Since I will likely get something out of my retirement plan even if a worst case scenario occurs, I count that part. I don’t even include social security in my retirement plan. If I get something from Social Security, it will be treated as a bonus.

To achieve my retirement goals, I invest with a defined asset allocation model that looks at all of my investments as a whole. When you retire, your portfolio switches from an investment mode to an income mode by either selling valued (hopefully) assets and / or deducting dividends for the cost of living. My plan is to build an ever larger stream of income from dividend growth stocks such as:

McDonald’s Corporation (MCD) is the largest fast food restaurant company in the world with around 35,000 restaurants in 119 countries. The company has paid a cash dividend to shareholders every year since 1976 and has increased its dividend payments for 43 consecutive years. Yield: 2.2%

Johnson & Johnson (JNJ) is a leader in the pharmaceutical, medical device and consumer goods industries. The company has paid a cash dividend to shareholders every year since 1944 and has increased its dividend payments for 58 consecutive years. Yield: 2.5%

The Procter & Gamble Company (PG) is a leading consumer goods company that markets home and personal care products in more than 180 countries. The company has paid a cash dividend to shareholders every year since 1891 and has increased its dividend payments for 63 consecutive years. Yield: 2.5%

3M Co. (MMM) is a diversified global company that provides enhanced product capabilities in electronics, healthcare, industrial, consumer, office, telecommunications, security, and other markets through coatings, sealants, adhesives, and other chemical additives. The company has paid a cash dividend to shareholders every year since 1916 and has increased its dividend payments for 63 consecutive years. Yield: 3.0%.

As the old saying goes, “Everyone has a plan – if you don’t plan, you don’t plan.” Retirement planning doesn’t have to be complicated, but if you don’t, your retirement planning will get complicated.

Full disclosure: Long MCD, JNJ, PG, MMM,

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