Diversify Your Retirement Income

Diversification, it's not just for income any more. Let's talk about the importance of not putting all of your retirement funds into one solution. Maybe you work for a company that offers a defined benefit pension plan. Defined benefit plans are really on the way out. Companies such as Boeing, GM, and Ford have such huge pension plan obligations that they can no longer continue to fund them.

United Airlines declared bankruptcy and got out from under their huge pension plan obligations. As a result, retired employees saw their monthly benefit drop by about 50%.

I would expect that GM and Ford would be following in United's footsteps in the very near future.

For those of us who are expecting Social Security to provide us with a comfortable retirement, think again. In the next 10 years, the bulk of the baby boomers will be receiving social security and for the first time in the history of the plan, Social Security will be paying out more than they take in. The government will have to make up the difference.

This is why it is vital that you do not rely on only one source of retirement income in your plans.