It used to be that only surviving soldiers were guaranteed an income to enjoy in their later years, a concept introduced during the first century B.C. by rulers of the Roman Empire. The idea of companies helping workers put money away for retirement didn’t exactly catch on with the rest of the workforce until the 19th century.

In the mid-1800s, some larger cities offered disability and retirement benefits to police, firefighters and other public sector employees. It wasn’t until 1875 that American Express created the first private pension plan in the U.S. to provide income for retired workers and those with disabilities.

At that point, the concept spread rapidly, with about 200 pension plans adopted by larger corporations by 1926. Defined benefit plans grew to cover 26.3 million private sector workers by 1970, which represented 45 percent of all private sector employees.1 Then, those numbers began to drop with the introduction of the defined contribution plan.

Today, only 15 percent of private sector workers and 75 percent of state and local government workers participate in a traditional pension plan. 2 According to the U.S. Bureau of Labor Statistics, there are a couple of options for how to receipt pension benefits. One is through a series of monthly payments over time. The second is a lump sum paid out all at once.

In the end, the amount of money may end up being about the same, if you consider that the lump sum invested for a conservative return (say 4 percent) would be the equivalent to a lifetime of payments over the same number of years it was invested, given assumptions about life expectancy and investment returns.3

A lump-sum payout gives retirees a bit more control over the distribution of those assets, but the tradeoff may be a greater risk of running out of money. If you’re interested in ways to take a portion of your retirement assets and benefit from the guarantee of a reliable income stream, we can share strategieson how to do so using insurance products, such as annuities.

Interestingly, the more people understand their financial options, the better off they tend to be. New research indicates that workers who know more (as measured by financial wellness assessments) tend to have higher contribution rates to employer-sponsored retirement plans.4

Fortunately, the idea of educating workers on financial matters is spreading quickly. Today, more than 80 percent of U.S. employers offer some type of wellness program and offering financial wellness programs is on the increase. There’s even better news: Financial wellness is also associated with better sleep, reduced stress and higher productivity.5

If you don’t participate in a company-sponsored retirement plan, you may in the near future. A recent survey found that 21 percent of corporate HR professionals report their companies now automatically enroll current employees in their sponsored retirement plans (although workers have the ability to “opt out” if they want). While auto-enrolling new employees is not a new trend, automatically enrolling current employees who have not been participating in the plan now is.6


Content prepared by Kara Stefan Communications. 

1 Liz Davidson. June 21, 2016. “The History of Retirement Benefits.” Accessed July 15, 2016.
2 William J. Wiatrowski. U.S. Bureau of Labor Statistics. June 2016. “You’re getting a pension: What are your payment options?” Accessed July 15, 2016.
3 Ibid.
4 The National Association of Plan Advisors. May 31, 2016. “Report: Contributions Climb with Financial Wellness.” Accessed July 15, 2016.
5 Lou Carlozo. U.S. News & World Report. May 19, 2016. “How Companies Invest in Financial Wellness.”
6 John Iekel. National Tax-deferred Savings Association. July 7, 2016. “Nuanced Changes in Retirement Benefits, Study Finds.” Accessed July 15, 2016.


We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. 

All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to protection benefits or steady and reliable income refer only to fixed insurance products, not securities or investment products.  Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.  If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference. 

The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by tMedia, LLC, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. tMedia, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
Was this information helpful? Should we publish more like this?