Planning for retirement: Why you’ll need recurring income

For years, most people planning for retirement have heard about the wisdom of contributing to a 401(k) or similar plan. But as the financial crisis turned into a full-blown recession, everybody saw their investment accounts shrink.
a bunch of benjamins
Creative Commons License photo credit: nick farnhill

Plans like the 401(k) let people contribute pre-tax dollars into an investment account that is expected to increase in value over time.

But now the financial situation has gotten so bad that Time magazine’s Oct. 19 cover story says it’s time to retire the 401(k). According to the article, the balance of the average 401(k) dropped 31 percent from the end of 2007 through March 2009.

“In a system in which one year’s gains build on the next, the disaster of 2008 will dent retirement savings long after the recession ends,” the article says.

The magazine said the “401(k) was never meant to replace the employer-guaranteed pension fund, supplemented by Social Security, as the cornerstone of our nation’s retirement system.”

“But propelled by a combination of companies looking to cut costs and consumers who wanted control of their retirement destiny, that’s exactly what happened,” the story says.

The magazine suggests several fixes to the 401(k) issue, including a form of retirement insurance that could pay for up to 30 percent of retirement.

Would it be OK if I suggested another alternative for those who are planning for retirement? Recurring income.

Recurring income is doing work right one time, but getting paid for it over and over again. It’s similar to payments Michael Jordan gets when someone buys his brand of shoes or checks Elvis Presley’s heirs get when someone downloads one of his songs from the Internet.

Unfortunately, not many of us can play basketball like Michael or sing like Elvis.

Fortunately, there’s another option. Network marketing has allowed thousands of people to create recurring incomes ranging from a couple of hundred dollars a month to tens of thousands of dollars a month.

It’s not easy. It’s not a “get-rich quick scheme.” But it is possible.

Everyone planning for retirement now realizes that relying on traditional methods is no longer enough. Why not invest your time and effort in a business that provides recurring income?

Steve DeVane

One Response

  1. This article makes some very valid points. We have seen most of our clients experience falls in pension values over the last three years. Some have by no recouped some of these losses but will still be poorer in the long run. Income in retirement is such a difficult issue. A small net working business could be an answer. One thing is certain – many of us will be working for longer than we had anticipated 10 years ago.

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