Retirement Terms in the US, My Retirement Plans - Coursework Example

The Last Hurrah Texas A&M-Commerce In partial fulfillment of the requirements for MGT 590 Lloyd M. Basham May 24, Table of Contents Abstract……….………………………………………………………………………………...3 Introduction….…………………………………………………………………………………4 Marketing Strategy....…………………………………………………………………………..4 Retirement….………………………….………………………………………………………..5 Retirement Terms in the Country……………………………………………………………….6 My Retirement Plans …………………………………………………………………………… 8 Conclusion….…………………………………………………………………………………..11 References……………………………………………………………………………………...11 Appendix…………………………………………………………………………………….....12 Abstract Before bidding the company farewell, I would like to assure that the company shall rise from the hitting the wall. A marketing strategy was made and must be evaluated and then implemented. After success is ensured, that would be the last hurrah for me. It is now time to retire early. Taking into account the US statistics on retirement and benefits, I know for sure that I would be financially stable when retiring. I would do many things emotionally, physically and mentally upon retiring to enjoy life, achieve happiness and be able to relax. Keywords: Marketing strategy, Retirement Plans, US retirement statistics The Last Hurrah Introduction “Retirement has been a discovery of beauty for me. I never had the time before to notice the beauty of my grandkids, my wife, the tree outside my very own front door. And, the beauty of time itself.” This statement regarding retirement was quoted from Hartman Jule. Retirement became an eye-opener for him and a chance to enjoy life each day. Of course, this is also what I want to achieve but before retiring, things must be planned well and as Corporate Officer, unfinished businesses must be completed. Marketing Strategy In achieving global competitiveness in the company, strategic marketing management is needed. Innovation, customer satisfaction and producing quality products are the main objectives. Secondary objectives include optimizing processes to achieve better performance like the incorporation of the Six Sigma method and minimizing waste through the Lean method. For the domestic market, we must be aggressive in sales and advertising of our products to attract more buyers. We must always make sure to provide quality products and deliver them on time to these buyers to gain their loyalty and support. For the international market, marketing policies and objectives must be reviewed from time to time. Considering Europe, higher profit opportunities, larger customer network and global competition may be achieved. According to Kotler and Keller (2009), risk and competitive advantage of our products must be taken into consideration basing from the customer’s needs. If there comes a time that the problems such as projections of the company hitting the wall and the need to downscale operations, solutions to these troubles must be prepared beforehand or must be immediately executed as to prevent aggravation of the said problems. One solution is to lay off employees, from corporate officers to management staffs up to administrative personnel and laborers. This solution may act as a double-edged sword to both the company and employees. Another solution is to tap the loyalty of customers as to have their commitment in buying our products. Another is by keeping focus (Green, 2012). By this, we can assess into what field we would put our “residual strength” to help our company regain balance and composure. Be it profit, sales, customer satisfaction or the international market. Hitting the wall is like falling and standing up again, we must start anew and refreshed. These proposed solutions or a combination of them must be suggested to the marketing management before letting the board evaluate it. After evaluation by the board of director, it may then be implemented. Then, I must make sure to be a part of the implementing body. Cooperation of each and every one must then be guaranteed. Lastly, after implementation, I can now submit my paper on retirement. Retirement Retirement is a voluntary withdrawal from the work force at the age that best suits an individual’s abilities, interests, and career plans (Walker and Lazer, 1978 as cited by von Watcher, 2009). Merriam Webster (n.d.) defines retirement as an act of withdrawal from ones position or occupation or from active working life. As for me, retirement means having time to relax, take a vacation, spend more time with the family and do things that were never done before due to lack of time and. It is the time to look back to my active years in the business, my experiences, mistakes and the lessons that I learned. However, at the back of my mind, I’m just 49 and not yet that old to retire, I can do more and earn more. According to Jones (2012), the average non-retired American now expects to retire at age 67, up from age 63 a decade ago and age 60 in the mid-1990s. The results are from Gallups annual Economy and Personal Finance survey, conducted April 9-12. Overall, 26% of non-retirees expect to retire before age 65, with 27% expecting to retire at age 65 and 39% after age 65. The percentage that expects to retire after age 65 is up from 21% in 2002 and 12% in 1995. Another survey by Gallup also finds a steady increase in the average age at which retirees actually retired, from age 57 in 1991 to age 60 today. The average retirement age first reached 60 in 2004 and has generally held there since (Jones, 2012). The results of these surveys were the effects of the global recession that happened in 2008. Many employees were laid off, many were buried with debt and the economy weakened. Gallup also found a new low of 38% of non-retirees saying they will have enough money to live comfortably in retirement, down slightly from 42% last year. The graph of this survey can be seen in the Appendix A. When Gallup first asked the question in 2002, 59% thought they would have enough. The trend of the graph is that the ones who think they will have enough money during retirement will be decreasing. The country has yet to fully recover from the tremendous blow and the aftershocks of the recession, retirement age increased which means more people having to strive for additional years before finally withdrawing from the workforce. Retirement Terms in the Country Early retirement? Why not. I have been a Corporate Officer in the company for some years. I would be 50 during the time of retirement paper submission. According to the company, I would receive a corporate pension and an employee pension as well. That sounds good. I may opt for early retirement. The company would also begin receiving the corporate and employee pension when I would be 50, 5 years earlier than what is standard. That would be for me. Meanwhile let us take a look at the pensions received by employees in the country. According to Andersen, Gustman and Steinmeier (1999) as cited by von Watcher (2009), data suggests that pension plans have evolved toward encouraging early retirement. While the normal retirement age was 65 in 82% of all pension plans in 1969, this was the case for only 43% of plans in 1983. Further, Anderson et al. (1999) reported that the accrual rate of pensions declined for ages around 60 during the 1980s, and that the fraction of plans offering early retirement options rose from 75% to almost 100%. One way to interpret the data on pension plans is that employers did not need to make pension plans more stringent for employees towards the end of working life because they already had sufficiently increased the incentives for early retirement. On corporate pension, according to Milliman 100 Pension Funding Index (2012), the funded status of the 100 largest corporate defined benefit pension plans dropped by $39 billion during April 2012. April’s funded status decrease was due primarily to a decrease in the corporate bond interest rates that are the benchmarks used to value pension liabilities. As of April 30, 2012, the funded ratio fell to 82.9%, down from 85.0% at the end of March 2012. Pension liabilities, or projected benefit obligations, increased by $35 billion during April, raising the Milliman 100 PFI value to $1.561 trillion from $1.526 trillion at the end of March. The change resulted from a decrease of 12 basis points in the monthly discount rate to 4.76% for April, from 4.88% for March. The cumulative asset return over the last 12 months has been 5.3% and the Milliman 100 PFI funded status deficit has increased by $122 billion. For these 12 months, the funded ratio of the Milliman 100 companies dropped to 82.9% from 89.7% (Milliman, 2012). These data just means a decrease for the corporate pensions that will be received by employees of some companies with pension providers assessed by the Milliman Group. According to the same group, if the Milliman 100 PFI companies were to achieve a 7.8% median asset return expected for their pension plan portfolios and the current discount rate of 4.76% were to be maintained during 2012 through 2013, they forecast the funded status of the surveyed plans would increase. This would result in a projected pension deficit of $226 billion. They have assumed 2012 aggregate contributions of $67 billion and 2013 aggregate contributions of $81 billion (Milliman, 2012). The 2012-2013 projection of Milliman is good sign of an increase in the corporate pension percentage. Their data shows a decrease in 2012 and a recovery in 2013 simultaneous with the recovery of our economy. In addition to national economic problems, there remain serious questions about the long-term health of Social Security and Medicare, two programs that have helped U.S. retirees for at least five decades. President Obama devoted a large fund to the health care system of the country. Retirees, usually age 60 and up, are the ones prone to illnesses and hospitalization. The government must fast track the laws or bills regarding the benefits to be given by the healthcare system of the country. My Retirement Plans Having confidence in my retirement benefits, corporate pension, employee pension and health benefits, I would choose to retire early. I’ve got the job and experience that makes me eligible for a comfortable life and lifestyle to retire early. As Corporate Officer, I think it’s time that the company pays me my loyalty and dedication for working a long time. The money that I would receive will finance me and my wife. My children can now take care of themselves. Also, I could invest some of that money for the money to grow and not be wasted instead. Money invested would also be a big help for us because we can directly pull it out whenever needed or whenever financial problems occur. I am confident that I would still be financially stable despite retiring early. In the Survey by Gallup as written by Jones (2012), I am part of the 38% who expects to be happy when retiring. Emotionally speaking, happiness and fulfillment and relaxation are the things that I would seek. According to Greenspun (2006), suppose that you are retired, your one job is the pursuit of happiness. If you are not happy, therefore you are a failure at your job and in your life. But how can you be happy 24/7? Perhaps if you moved into a hotel in Orlando and went to Disneyworld every day you would be pretty happy. But if you retain the responsibilities of home- and car-ownership, much of your life will continue to be mundane, boring, or unpleasant. I can say that my life would not be as unpleasant as that stated above; I can hire people to help me enjoy my retirement years. Happiness also means spending time with the family during weekends or weekdays, travelling to different places and catching up with some friends. I would also prefer sitting comfortably in the beach in the Caribbean sipping some juice while listening to good music, being the man of the house again, having to spend some time alone contemplating about the past and the future and many other things. Physically, I would like my body to be in great shape. I would have an active lifestyle so as to avoid complications and diseases of getting old. Mentally, I would still make my mind work by thinking about my investments or trying to have intellectual discussion with some people that I knew. Conclusion After finishing the unfinished business in the company- trying to recover from the impact upon hitting the wall, planning and implementing solutions, I would then go to early retirement. Upon contemplating on the retirement statistics of the country, I can assume that I would have a comfortable retirement, with plenty of pension and benefits. I would then do many things that I haven’t done before and strive to be relaxed and happy. As Robert Benchley stated, “The thing to do is to make money that you don’t have to work after the age of twenty-seven. In this case is impractical, stop working at the earliest moment, even if it is a quarter past eleven in the morning when you find you have enough money.” References Green, H. (2012). How to Avoid Hitting the Wall in Your Strategic Plan. Retrieved May 22, 2012 from http://www.forbes.com/sites/work-in-progress/2011/03/09/how-to-avoid-hitting-the-wall-in-your-strategic-plan/ Greenspun, P. (2006). Early Retirement. Retrieved May 24, 2012 from http://philip.greenspun.com/materialism/early-retirement/ Jones, J.M. (2012). Expected Retirement Age in U.S. Up to 67, Average expected retirement age was 60 in mid-1990s. Retrieved May 23, 2012 from Gallup http://www.gallup.com/poll/154178/expected-retirement-age.aspx Kotler, P. & Keller, K. (2009). Marketing Management (13th ed) (pp 638-663). Pearson/Prentice Hall. Merriam Webster (n.d.). Retrieved May 23, 2012 from http://www.merriam-webster.com/dictionary/retirement Milliman (2012). Decline in Discount Rates Drives Pension Plans to Record Deficits in 2011. Retrieved May 24, 2012 from http://www.milliman.com/expertise/employee-benefits/products-tools/pension-funding-index/ von Watcher, T. (2009). The End of Mandatory Retirement in the US: Effects on Retirement and Implicit Contracts. Retrieved May 23, 2012 from Columbia University http://www.columbia.edu/~vw2112/papers/vonwa_mr_2009.pdf Appendix Appendix A Source: Jones (2012) Read More