Retirement Reality for Small Business

December 4, 2013

pic-money-investWe all have our own dream version of retirement.  Unfortunately, figuring out how to achieve that dream is often a tough dose of reality – something even more complex when you run a small business.  Each year the Employee Benefit Research Institute conducts a Retirement Confidence Survey. Some very telling views and attitudes of working-age Americans regarding retirement, preparations for retirement and confidence with regard to various aspects of retirement were found in 2012.  Following are just a few:

  • Americans’ confidence in their ability to retire comfortably is stagnant at historically low levels.  Just 14 percent are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the low of 13 percent measured in 2011 and 2009).
  • Twenty-five percent of workers say the age at which they expect to retire has changed in the past year.  In 1991, 11 percent of workers said they expect to retire after age 65, and by 2012 that has grown to 37 percent.
  • Many workers report they have virtually no savings and investments.  In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.
  • Current workers expect to be significantly less reliant on Social Security as a major source of retirement income than retirees.

Unless you believe you’ll never retire, these findings seem daunting.  The prospect of your dream retirement seems less and less attainable; however, it’s never too late to take steps to get “closer” to your goals and the beginning of a new year is a great time to implement some fundamental long-term strategies that you can perform in pursuit of your goals. NSBA’s new partner in the retirement arena, AXA Equitable, has the following  suggestions .

  • Diversify – Determine your risk tolerance and then invest in a variety of asset classes because it is impossible to predict which asset class will be the best or worst performers in any given year.  This does not eliminate the risk of experiencing investment losses and may prevent you from capturing top-performer returns in any given year; however, this strategy can also help spread volatility risk among different classes.
  • Rebalance – Adjust your portfolio so that your long-term portfolio strategy stays on target and doesn’t get skewed by outperformance or underperformance of certain asset classes.   This way no single asset class will dominate your portfolio.  This annual “housecleaning” of your portfolio can be critical to making the most of the benefits of asset allocation.
  • Dollar Cost Average – This is a simple technique where you invest a set amount on a regular basis.  This lets you buy more shares when prices are low and fewer when they rise. The result can be a lower average cost per share.  Dollar cost averaging does not assure a profit nor does it protect against loss in declining markets. To be effective, there must be a continuous investment regardless of price fluctuations.  Investors should consider their financial ability to continue to make purchases through periods of low price levels.

By taking these basic simple steps, your retirement reality could look just a bit brighter.

AXA Equitable’s Members Retirement Program is the only retirement program endorsed by the National Small Business Association. The program offers various retirement plan options as well as individual investment options that can help you plan for a successful retirement.

If you would like more information contact a Retirement Program Specialist at 800-523-1125, option 3 and ask for extension 6182 or visit us on the web, click here. Information and consultations are free of charge and available to NSBA members at no obligation.

Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.

The Members Retirement Program (contract form #6059) is funded by a group variable annuity contract issued and distributed by AXA Equitable Life Insurance Company, New York, NY. AXA Equitable Life Insurance Company does not provide tax or legal advice.

GE 89850 (11/13) (Exp. 11/15)