INTRODUCTION
Welcome to Cortburg Speaks Retirement
An audio podcast about investing in the stock market, financial planning, money management and retirement planning. Each Wednesday, we help investors at all stages of life learn how to potentially grow and preserve their money from first job through retirement.
Now here is your host, Miguel Gonzalez.
HOST
Good morning and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.
On this week’s audio podcast, I celebrate President’s Day by sharing information about the 3 U.S. Presidents who still influence our retirement planning today.
Each year, Presidents' Day is celebrated on the third Monday in February, paying tribute to George Washington, Abraham Lincoln, and the other U.S. presidents who helped create this country and allowed it to thrive.
But while the earliest presidents were responsible for shaping U.S. democracy, it's the presidents of the last 100 years who have shaped the personal finances of many modern U.S. households. Here we discuss three U.S. presidents who had a role in shaping American retirement planning, and how their efforts endure today.
Franklin Delano Roosevelt
In 1935, President Franklin Delano Roosevelt signed the Social Security Act, which created the Social Security system we know today. When Social Security was created, it was designed to be one leg of the "three-legged stool of retirement,” with the other two legs being personal savings and a corporate or government pension. Today, fewer workers have access to a pension, which means that Social Security benefits continue to constitute a major part of many adults' retirement plans.
In 2019, nearly 70 million Americans received benefits administered by the Social Security program, and 55% of these beneficiaries are women.1
Gerald R. Ford, Jr.
In 1974, President Gerald Ford, Jr., signed the Employee Retirement Income Security Act (ERISA), which revolutionized pension rights and provided a strict set of rules and regulations to govern employee-sponsored retirement plans. Another key aspect of ERISA involved providing employees with significant tax benefits for contributing to an ERISA-covered retirement plan.
ERISA requires plan sponsors to provide participants with a variety of information, including:
● Disclosures about plan features
● Disclosures about plan funding
● Minimum standards for plan participation
● How and when a pension vests
● How pension benefits accrue
● How pension benefits are funded
● What fiduciary responsibilities a plan sponsor or administrator has
● How to file grievances or appeals to access plan benefits
Jimmy Carter, Jr.
In 1978, President Jimmy Carter, Jr., signed the Revenue Act of 1978. This law amended Section 401(k) of the U.S. Tax Code to expand retirement plan offerings. If the phrase 401(k) sounds familiar, it's because this is the legislation that helped create a new type of retirement plan.
Section 401(k) took effect Jan. 1, 1980, and, for the first time, gave employees a way to defer their salary, bonuses, or stock options into a retirement account, tax-free. Many employers created and offered 401(k) plans as a way to supplement (or, in some cases, replace) the defined benefit pension plans.
Today, 401(k) plans remain one of the most popular and frequently-used ways to save for retirement. As of 2022, the average U.S. worker is setting aside about 14% of their total income in a 401(k) retirement plan.2
Make sure to visit our website, www.CortburgRetirement.com. Our site is filled with educational videos, eBooks, publications, and financial calculators designed to help you learn more about your finances. As you search our site, send us a note regarding any questions you may have about any particular investment concepts or products. We will get back to you quickly with a thoughtful answer.
This is Miguel Gonzalez, Certified Retirement Counselor (CRC) and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational podcast.
DISCLOSURES
Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
CRC conferred by The International Foundation for Retirement Education.
Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.
Private Advisor Group, LLC and Cortburg Retirement Advisors, Inc. are separate entities from LPL Financial.
Investing involves risk including possible loss of principal.