What needs to be in a wealth plan? The responsibility of creating a comprehensive wealth plan wasn't always on the shoulders of everyday working people. Decades ago, the average person lived only 10 to 12 years after retirement and could rely on a pension and Social Security benefits to largely meet their needs. Pensions, or defined benefit plans, put the risk of creating retirement income on the employer. They were responsible for growing their pension fund investments, but after life expectancies began to rise along with market volatility, companies wanted to ditch the risk of providing lifetime income to their former employees. After lobbying with Congress to create a new investment vehicle for employees known as a defined contribution plan, the 401(k) plan was born. Now, the risk of creating lifetime income is on the employee. It’s up to you to create a retirement income plan that provides for your needs, which is especially challenging as we are living longer.
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