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Opinion Editorials

Why great retirements do not come from the fed or employers



A “must achieve” goal

This time of year brings out the planning demons in most of us. Our jobs, hobbies, family, even our bodies. If there’s a goal, at least if there’s a serious goal, there’s a plan of some kind. We all pretend that every year on February 14th, love is in the air. It’s also the day most people realize they’ve ignored many if not all their goals, and the plans to attain them. This, even though they were the architects of both the goals and the plans.

We pretty much know, though, that the things we make happen are the ones for which we hold no ambiguity. And yet . . .

The one goal virtually all of us view as a ‘must achieve’, is retirement.

The average American man reaches his 58th birthday with, give or take, around $60,000 in their job’s retirement plan. Betcha that inspires confidence. Think that’s bad? Women are pretty much in worse shape. It comes from thinkin’ that the government, or your employer, or both, have your best interests at heart. That they have a plan to generate a superb retirement for you.

Let’s look at the government’s motivation first

Beginning with Boomers as the prime target initially, the 401k and IRA were created. They were slickly marketed with a campaign touting tax deferral, and visions of huge piles of stored earnings, warehoused for Boomers’ abundant and richly deserved retirement. Here’s how it works, by definition. This assumes there are never any 2008s in the picture, a fantasy if ever there was one.

For 25-40 years, the taxpayer pays a chunk of their earnings to the ‘qualified plan’. In return for this wise decision, they’re given a tax break. For every dollar they divert into the plan, that amount is no longer counted as income, that year — and not taxed. How cool is that?!

According to the consensus, it’s very cool indeed. 

Take the couple who put in $10,000 a year, every year, for their entire working lives. Let’s say they make roughly 5.25% annual yield for 35 years. Every month, month in and month out, they dutifully fork out $833.34 as a team. They arrive at retirement with around a million bucks in their plan. They’re set, right?

You tell me. The bottom line principle here, is that the government’s plan grants tax deferment on relatively small sums — in the hard working years leading to retirement. Typically $5-14,000 annually. But when the taxpayer hits retirement, they’ll be paying taxes on 4-12 times that much every year. Furthermore, even if they produce a yield more than the 4% financial planners typically tell them to expect, that’s a lousy $40,000 a year — before taxes — state and federal.

In plain English, government baited the hook with tax breaks on amounts roughly 1/5 – 1/12 of what they’ll be collecting from you upon retirement. Geez, hurry up and tell me where I can sign up for that smokin’ good deal.

Oh, and that 4%? Quote that yield to retired folks today, who, as of last Friday were gettin’ less than 1.9% on a 10 year government treasury. Can’t find those people? They’re easy to find. Just go to the nearest Wal-Mart. They’re the ones with the big smiles, welcoming you.

‘Course, we all know that for every worker bee who amasses a two comma pile of cash in their 401k, there’re 100-200 who never hit $100,000. The takeaway?

The only reason ‘qualified plans’ exist in their present form, is to ensure the government maximum tax dolllars when your generation reaches retirement. Guess you might say, it’s Uncle Sam’s retirement plan, not yours. You save around $60-100,000 in deferred taxes. They usually get that much from a successful taxpayer/investor (401k) in the first 5-10 years of retirement. In other words, you gladly agreed to save yourself a buncha pennies in taxes each year for 25-40 years, for the privilege of paying a buncha dollars every year you’re retired. Ouch.

Then there’s your employer’s motivation

First off, shed any notion you might have about their noble intentions when it comes to the quality of your retirement lifestyle. They’d hafta climb three rungs up on the ‘I care’ ladder to reach apathetic. No, retirement plans for their employees is purely a matter of not having to fund generous pensions, as they did for so many generations up ’til around 1980.

Sure, they do the matching thing. But compared to funding pensions for all their full time, vested employees? Gimme a break. This begins and ends with limiting their costs, which, by the way, I’m all for. The government handed the gift that never stops giving with ‘qualified plans’, which was a sea change in our culture. It took retirement planning from the employer and thrust it upon the employee, making all of us responsible for our own post employment lifestyle. Again, I’m all for that. Being responsible for our own lives is what America is all about.

But the government, with the too willing help of employers, presented it as something it obviously isn’t. If it was so effective, why aren’t there millions retiring well, living more than comfortably off the income generated by their robust 401k’s?

Of course, all the preceding begs the question, doesn’t it?

Before we continue, I challenge the reader to conduct a search through the month of January. Find just one retired couple who’s living the retirement for which they worked so hard the last several decades — from the fruits of their 401k or IRA. You be the one to define what a ‘solid’ retirement is. Fine just one couple.

The moral of the story

Take your own after tax money. Generate your own retirement goals and a Purposeful Plan to get you there. Use real estate as your primary, but certainly not your only vehicle. Stop relying on the bait ‘n switch, ‘we gotcha covered’, ‘you don’t hafta do much’ plans provided by a loving and caring government and employer.

Or, simply ask yourself: How’s it been workin’ out for Americans lately?

Jeff Brown specializes in real estate investment for retirement, has practiced real estate for over 40 years and is a veteran of over 200 tax deferred exchanges, many multi-state. Brown is a second generation broker and works daily with the third generation. With CCIM training and decades of hands on experience, Brown's expertise is highly sought after, some of which he shares on his real estate investing blog.

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  1. Roland Estrada

    January 2, 2012 at 1:17 pm

    As Ronald Reagan once said, "The scariest thing a citizen can here is – We're the government and we're here to help".

  2. Jeff Brown

    January 2, 2012 at 2:35 pm

    In a nutshell, Roland. Nothing's changed.

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Opinion Editorials

How strong leaders use times of crises to improve their company’s future

(EDITORIAL) We’re months into the COVID-19 crisis, and some leaders are still fumbling through it, while others are quietly safeguarding their company’s future.



strong leaders

Anthony J. Algmin is the Founder and CEO of Algmin Data Leadership, a company helping business and technology leaders transform their future with data, and author of a new book on data leadership. We asked for his insights on how a strong leader can see their teams, their companies, their people through this global pandemic (and other crises in the future). The following are his own words:

Managers sometimes forget that the people we lead have lives outside of the office. This is true always, but is amplified when a crisis like COVID-19 occurs. We need to remember that our job is to serve our teams, to help them be as aligned and productive as possible in the short and long terms.

Crises are exactly when we need to think about what they might be going through, and realize that the partnership we have with our employees is more than a transaction. If we’ve ever asked our people to make sacrifices, like working over a weekend without extra pay, we should be thinking first about how we can support them through the tough times. When we do right by people when they really need it, they will run through walls again for our organizations when things return to normal.

Let them know it’s okay to breathe and talk about it. In a situation like COVID-19 where everything is disrupted and people are now adjusting to things like working from home, it is naturally going to be difficult and frustrating.

The best advice is to encourage people to turn off the TV and stop frequently checking the news websites. As fast as news is happening, it will not make a difference in what we can control ourselves. Right now most of us know what our day will look like, and nothing that comes out in the news is going to materially change it. If we avoid the noisy inputs, we’ll be much better able to focus and get our brains to stop spinning on things we can’t control.

And this may be the only time I would advocate for more meetings. If you don’t have at least a daily standup with your team, you should. And encourage everyone to have a video-enabled setup if at all possible. We may not be able to be in the same room, but the sense of engagement with video is much greater than audio-only calls.

We also risk spiraling if we think too much about how our companies are struggling, or if our teams cannot achieve what our organizations need to be successful. It’s like the difference in sports between practice and the big game. Normal times are when we game plan, we strategize, and work on our fundamentals. Crises are the time to focus and leave it all on the field.

That said, do not fail to observe and note what works well and where you struggle. If you had problems with data quality or inefficient processes before the crisis, you are not fixing them now. Pull out the duct tape and find a way through it. But later, when the crisis subsides, learn from the experience and get better for next time.

Find a hobby. Anything you can do to clear your head and separate work from the other considerations in your life. We may feel like the weight of the world is on our shoulders, and without a pressure release we will not be able to sustain this level of stress and remain as productive as our teams, businesses, and families need us.

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Opinion Editorials

Declutter your quarantine workspace (and brain)

(EDITORIAL) Can’t focus? Decluttering your workspace can help you increase productivity, save money, and reduce stress.




It’s safe to say that we’ve all been spending a lot more time in our homes these last few months. This leads us to fixate on the things we didn’t have time for before – like a loose doorknob or an un-alphabetized bookshelf.

The same goes for our workspaces. Many of us have had to designate a spot at home to use for work purposes. For those of you who still need to remain on-site, you’ve likely been too busy to focus on your surroundings.

Cleaning and organizing your workspace every so often is important, regardless of the state of the world, and with so much out of our control right now, this is one of the few things we can control.

Whether you’re working from a home office or an on-site office, take some time for quarantine decluttering. According to The Washington Post, decluttering can increase your productivity, lower stress, and save money (I don’t know about you, but just reading those three things makes me feel better already).

Clutter can cause us to feel overwhelmed and make us feel a bit frazzled. Having an office space filled with piles of paper containing irrelevant memos from five years ago or 50 different types of pens, has got to go – recycle that mess and reduce your stress. The same goes with clearing files from your computer; everything will run faster.

Speaking of running faster, decluttering and creating a cleaner workspace will also help you be more efficient and productive. Build this habit by starting small: try tidying up a bit at the end of every workday, setting yourself up for a ready-to-roll morning.

Cleaning also helps you take stock of stuff that you have so that you don’t end up buying more of it. Create a designated spot for your tools and supplies so that they’re more visible – this way, you’ll always know what you have and what needs to be replenished. This will help you stop buying more of the same product that you already have and save you money.

So, if you’ve been looking to improve your focus and clearing a little bit of that ‘quarantine brain’, start by getting your workspace in order. You’ll be amazed at how good it feels to declutter and be “out with the old”; you may even be inspired to do the same for your whole house. Regardless, doing this consistently will create a positive shift in your life, increasing productivity, reducing stress, and saving you money.

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Opinion Editorials

How to ask your manager for better work equipment

(EDITORIAL) Old computer slowing you down? Does it make a simple job harder? Here’s how to make a case to your manager for new equipment to improve your productivity.



better equipment, better work

What is an employee to do when the work equipment bites.

Let’s be frank, working on old, crappy computers with inefficient applications can make the easiest tasks a chore. Yet, what do you do? You know you need better equipment to do your job efficiently, but how to ask the boss without looking like a whiner who wants to blow the department budget.

In her “Ask A Manager” column, Alison Green says an employee should ask for better equipment if it is needed. For example, the employee in her column has to attend meetings, but has no laptop and has to take a ton of notes and then transcribe them. Green says, it’s important to make the case for the benefits of having newer or updated equipment.

The key is showing a ROI. If you know a specific computer would be a decent upgrade, give your supervisor the specific model and cost, along with the expected outcomes.

In addition, it may be worth talking to someone from the IT department to see what options might be available – if you’re in a larger company.

IT professionals who commented on Green’s column made a few suggestions. Often because organizations have contracts with specific computer companies or suppliers, talking with IT about what is needed to get the job done and what options are available might make it easier to ask a manager, by saying, “I need a new computer and IT says there are a few options. Here are my three preferences.” A boss is more likely to be receptive and discuss options.

If the budget doesn’t allow for brand new equipment, there might be the option to upgrade the RAM, for example. In a “Workplace” discussion on an employee explained the boss thinks if you keep a computer clean – no added applications – and maintained it will perform for years. Respondents said, it’s important to make clear the cost-benefit of purchasing updated equipment. Completing a ROI analysis to show how much more efficiently with the work be done may also be useful. Also, explaining to a boss how much might be saved in repair costs could also help an employee get the point across.

Managers may want to take note because, according to results of a Gallup survey, when employees are asked to meet a goal but not given the necessary equipment, credibility is lost.

Gallup says that workgroups that have the most effectively managed materials and equipment tend to have better customer engagement, higher productivity, better safety records and employees that are less likely to jump ship than their peers.

And, no surprise, if a boss presents equipment and says: “Here’s what you get. Deal with it,” employees are less likely to be engaged and pleased than those employees who have a supervisor who provides some improvements and goes to bat to get better equipment when needed.

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