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Helping Middle Class Americans Protect their Retirement
Setting aside money for your retirement is
imperative, especially with Social Security benefits being threatened. For
those between ages 55 and 70, continuing to set aside monies for retirement is
essential. For most middle class Americans, investments for retirement while
employed are typically managed through the employer through a 401(k) or 403(b)
type plan. Upon retirement, most employers require that those funds be rolled
into an IRA. This transaction is not a taxable event; however, it does bring
certain risk factors into play that are foreign to most middle class Americans.
There are three risk factors which must be considered.
Creditor Risks
The first risk involves the potential for
your creditors to attack your retirement savings should they be located in an
IRA. In most states, IRAs are protected from creditors.
Investment Risks
The second risk factor
involves trying to invest for yourself. Erma Fromm, a national columnist,
commented in April of 2005 that most Americans are “dumb” about investing. Her
article was not insensitive or insulting toward the middle class, but rather,
correctly asserts that most Americans do not have the experience to invest their
own funds in the stock or bond markets. Likewise, most Americans do not have
the time or educational background to successfully navigate the financial
world. In the past five years, many Americans with sizeable IRAs or other
self-directed retirement plans have lost money in the stock or bond markets due
to poor investment decisions. This plan is intended to provide a fair and
decent return without taking undue risks. Your funds will be invested in a
fashion similar to a company pension plan. The primary difference between
investments in this plan versus a company pension plan is that the overwhelming
majority of individuals in this plan will be over the age of 55.
Healthcare Risks
Finally, should you or spouse require
nursing home care in the States of Colorado, Connecticut, New Jersey, Nevada, or
Ohio, your retirement funds will be counted as an asset for purposes of
determining Medicaid eligibility. In those States, the pension plans of public
employees are not considered an asset for Medicaid eligibility purposes and are
not subject to State Medicaid seizures. In those States, by definition,
traditional pension plans, and particularly those of the public employees within
the State, are considered sacrosanct.
A New Alternative
The Santa Maria Enterprise I, Inc. (SME),
has
developed a pilot program to develop a pension plan that protects middle class
Americans from the three risks mentioned above. Under this plan, the enrollee
transfers their IRA or other retirement funds to the SME Pension Plan and begins
employment. As an employee, pension
law allows an employee to become a member of this retirement plan. Once you
have become an employee and donated at least twenty (20) hours of service to a
charity of your choice, your funds are rolled over into the SME Pension Plan.
Thereafter, you retire from SME and receive retirement benefits in the form of a
monthly income. For more information, please refer to the Services menu above.
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