Ted Bauman: Retirement Options

Ted Bauman is one of the editors for Banyan Hill Publishing Company. He is most popular for several of his investment advice columns that he publishes through Banyan Hill Publishing Company. His investment advice is tailored to individuals who are trying to avoid excess governmental oversight and to be able to live a life that is free from excessive regulation.

Ted Bauman recently spoke about some of the differences between a traditional pension and what are known as cash balance plans. Anybody that is interested in their retirement should be aware of the differences between the two. Ted Bauman states that cash balance plans are seen as an alternative to traditional pension plans. As a well-known authority on the topic of asset protection, he has suggested that for individuals that earn higher incomes it may be wise to consider alternatives to the traditional retirement plan.

According to Ted Bauman, nearly ¾ of Americans are underprepared for retirement. He also states that for a long time traditional pension plans were seen as a secure and stable retirement plan. However, due to changes that were enacted by Congress, this may no longer be the case. In fact, there are many companies that have gotten into financial trouble paying pensions.

In comparison to a traditional pension plan a cash balance plan as of several key differences. It is most commonly compared to a hybrid of a 401(k) and a traditional pension. With a cash balance plan, there is no need for the employees to invest their own money. This is very similar to a traditional pension. A traditional pension typically begins to pay out somewhere between the age of 55 and 65. A cash balance plan will take into account the total number of years that an employee worked for the company in addition to the employees’ salary. Another large benefit is that cash balance plans are transferable while a traditional pension plan is not. Cash balance plans also can allow an employee to withdraw their money whenever they leave the job while a traditional pension plan will not begin to pay out until the employee reaches retirement age.