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The quest for retirement income |
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Herb Hopwood, Certified Financial Planner and president
of Hopwood Financial Services in Great Falls, Va., says he's not
sure a bundled product would be the answer.
"We're all looking for this Holy Grail, the perfect
investment, but the reality is it needs to be a solution based on
someone's particular situation. It's kind of like a mutual fund.
Some fund families are good at some things and not good at other
things. Is one company going to have the best policy for long-term
care and life insurance and disability? I just don't know.
"It would take more legwork, but if you shopped
around for the best policies at the most reasonable prices would
you be better off than having a bundled product?"
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| Healthy companies freeze defined benefit
pensions, 2004-06 |
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| Company |
U.S.
employees |
Participants
affected |
Type of freeze |
| 2006 |
|
|
|
| Coca-Cola Bottling Co. * |
6,100 |
4,500 |
Total |
| Nissan NA Inc. |
15,200 |
NA |
New employees |
| IBM Corp. |
125,000 |
117,000 |
Total |
| ALCOA |
48,000 |
NA |
New employees |
| 2005 |
| Verizon Communications |
240,000 |
50,000 |
Partial |
| Sprint Nextel Corp. |
82,900 |
39,000 |
Partial |
| Sears Holdings Corp. |
238,200 |
113,000 |
Total |
| Milliken and Co. |
10,200 |
9,300 |
Total |
| Lockheed Martin Corp. |
118,800 |
NA |
New employees |
| Hewlett-Packard Co. |
71,000 |
32,200 |
Partial |
| Ferro Corp. |
2,500 |
1,000 |
Total |
| Russell Corp. |
8,800 |
5,700 |
Total |
| 2004 |
| Circuit City Stores |
42,400 |
19,000 |
Total |
| Motorola Inc. |
30,600 |
NA |
New employees |
| Hospira Inc. |
9,800 |
8,250 |
Total |
| NCR Corp. |
11,400 |
9,200 |
Partial |
| Aon Corp. |
21,000 |
NA |
New employees |
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Financial firms join in
T. Rowe Price, the investment management firm, is one of several
mutual fund companies trying to find an appropriate way to convert
retirement savings into a reliable income stream.
"There are two primary paths being explored,"
says Jerome Clark, portfolio manager for T. Rowe Price retirement
funds. "One is through a guarantee typically tied to an insurance
product. That doesn't mean that it doesn't involve a money manager
who's partnered or involved in some fashion with the insurance product.
The other way some are exploring is a targeted income stream through
various investment products. When you go down that route you're
typically not providing a guarantee but you're targeting an income
stream."
Barry Vosler, a CFP at Linsco/Private Ledger in DeWitt,
Iowa, doesn't see a lack of innovative new products and he's not
sure that the insurance industry or the mutual fund companies can
provide one-stop solutions.
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