Total Financial Solutions President and CEO Arif Halaby recommends most people expecting a pension plan on only receiving 75 percent of the monthly payout they were promised.
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With more and more defaults occurring in the pension system among not only small organizations and municipalities, but large scale corporations as well, Halaby believes retirees will continue to face challenges when it’s time to collect their pensions in the future.
“I don’t want you to be caught short where you’re somebody who retires, looks around, and says, ‘What do you mean they’re cutting my pension? It’s the only source of retirement income I have,’” Halaby said. “I think you need more than just one source.”
Related: Total Financial Solutions: Planning For Required Minimum Distributions
By building a budget around 75 percent of the number the pension promises — and utilizing other retirement planning options like Roth IRAs, 401(k)s and life insurance policies to make up the difference — Halaby noted an individual is helping safeguard against not being able to afford the life they want to live in retirement.
“If you (receive) more, great,” he said, noting any extra money can be used to buy an RV or take a trip. “But if you get less, you’ve planned for it. You’re going to live accordingly, you’re going to save in your (other) retirement buckets.”
Jeff Girard, Halaby’s co-host on “Total Financial Solutions Safer Money Hour” on KHTS AM-1220, added that blindly trusting what is promised in a pension — whether it’s in the contract or not — can be dangerous, as taxes and laws directly affecting the pension system and the amount of funds available remain a mystery years down the line.
“Don’t just go with the status quo,” he said. “The ones that do really well, they challenge that. They take care of themselves, they have multiple sources of income and they don’t just rely on one, whether it’s an employer, government or a corporate entity, to pay them for not working for the rest of their life.”
Halaby added, “You’re counting on something that may or may not be there in the form in which you think.”
He continued, “That’s what we’re here for — our job is safer money choices. We’re experts in that field. Our job is to keep you from losing your principal, losing your interest, getting reasonable rates of return… (There’s) no cost to meet with us. If we can help you, it’s our pleasure.”
Ed. Note: This article is a KHTS Community Spotlight based on the latest “Total Financial Solutions Safer Money Hour” radio show on KHTS AM-1220.
Total Financial Solutions offers assistance with preparing for retirement in Santa Clarita and the surrounding valleys. Santa Clarita financial professional Arif Halaby, a Certified Estate Planner, and Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. As a well-known financial professional, Arif Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners retirement planning tips and guidance for dealing with today’s ever-changing financial needs.
Total Financial Solutions, Inc.
24322 Main Street
Newhall, CA 91321
661-753-9683
800-990-7344