Retirees, This Is Not Your Father's Retirement Plan: Constructing The 2015 Fill-The-Gap Portfolio

Dec. 25, 2014 12:19 AM ETARCC, COP, LUMN, DB, ED, EPR, PEAK, MAIN, MO, O, RAI, STON, SUI, T, VGR, VZ261 Comments
George Schneider profile picture
George Schneider


  • Defined benefit pensions are a thing of the past.
  • Not planning for our retirements; what were we thinking?
  • We can dig out of this gaping hole and fill in the gap.

The percentage of workers covered by a traditional defined benefit [DB] pension plan that pays a lifetime annuity, often based on years of service and final salary, has been steadily declining over the past 25 years. From 1980 through 2008, the proportion of private wage and salary workers participating in DB pension plans fell from 38% to 20% (Bureau of Labor Statistics 2008; Department of Labor 2002).

Defined Benefit, Defined Contribution, What's the Difference?

DB pensions are tied to employers who, consequently, bear the responsibility for ensuring that employees receive pension benefits. In contrast, Defined contribution retirement assets such as 401ks and IRAs are owned by employees who, therefore, bear the responsibility for their own financial security. This might sound scary, but it doesn't have to be.

From 1940 to 1960, the number of people covered by private pensions increased from 3.7 million to 19 million, or to nearly 30% of the labor force, according to the Employee Benefit Research Institute, or EBRI, and by 1975, 103,346 plans covered 40 million people, or close to 60% of the labor force.

Thanks to New Deal policies and companies' initiatives in the '30s to ensure that workers' pensions were safe, at least two generations grew up under the assumption that if they had a job with an established company, a retirement plan would help pay future bills. Many of today's workers' parents and grandparents left the workforce with some type of employer-provided income-from the time they retired until their death.

Pension plans have been declining since 1984: In 1983 there were 175,143 plans, but in 2008 there were only 46,926 plans. And so today, very few of us have our father's retirement plan and the security that came with it.

Why save for retirement? I'd rather buy a shiny new car.


This article was written by

George Schneider profile picture
Feel free to email me with any questions you may have at: geoschneider@hotmail.comAside from free articles available to the general public, additional early-access, value-added ideas and deep-dive articles are offered to paid subscribers on my premium newsletter platform, "Retirement: One Dividend At A Time" . This exclusive RODAT Portfolio has performed even better than my popular FTG Portfolio, with higher dividend income growth and greater capital appreciation.I'll be happy to send you subscription information and a couple of free, exclusive articles so you can judge for yourself if my service is for you.We now offer three subscription tier levels, all very affordable, one for every pocketbook.Just send me your email address and I'll send you all the information you need to decide if my service is suitable for you. Send your email to:geoschneider@hotmail.comIf you are interested in any of my very popular and easy to use digital utility solutions to add to your investing tool box to improve your investment outcomes, please visit my site: You'll find elegant applications that make it simple for you to track your portfolio in real time, make a watch list to follow in real time, track your dividend income and growth, and other applications. These applications will allow you to set alerts at prices you choose in order to obtain the yield and income that you want. They function as real time trade assistants and will improve your investment performance. You can even mirror the successful FTG Portfolio with "My FTG Mirror Calculator", and subscribers can mirror the premium subscriber portfolio with "MY RODAT Mirror Calculator" if they wish to emulate the out performance we've achieved in capital and income growth.I am a retired clinical psychologist, and administrator and owner of a rehabilitation clinic we founded 40 years ago. For over 55 years I have managed several portfolios composed of investments accumulated over our professional careers. Since the financial crisis of 2008, I have employed specialized, customized dividend growth strategies aimed at enhancing and growing a dividend income stream.Since December 24, 2014, I have demonstrated on Seeking Alpha the ongoing construction and portfolio management of the Fill-The-Gap Portfolio aimed at highlighting strategies investors may utilize to close the gap between an average Social Security benefit and the much greater costs faced in retirement.This portfolio has outperformed all of the broad market indexes by a very wide margin, growing dividend income and total portfolio value consistently while the broader indexes struggle in negative territory all year.Let me show you how to build and grow your portfolio and dividend income, step by step, towards a comfortable and secure retirement.Feel free to email me with any questions you may have

Disclosure: The author is long ARCC, ED, MO, SUI, COP, EPR, O, T, CTL, RAI, VGR, MAIN, STON, VZ. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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