PART 1 – Own and Run Your Retirement

Most professional sports teams have an owner.  He or she bought or inherited the team, has particular objectives in mind, objectives that include or invariably are enhanced by winning.  

PART 1 offers an overview of  similarities between their problem and building a retirement plan.

A Parallel Universe

Let’s start with an example.  Table 1 creates a blended hockey / retirement team, to highlight similarities in plans.  The roster includes two goalies, the “last defense” against opposition goals that jeopardize chances of winning — much as Social Security provides a “last defense” against lack of resources that jeopardize sufficient funding for retirement.  This hockey team has eight players who support their goalie by focusing  on defense to minimize  scoring lby the other team — a retirement plan could have a similar array of funding sources that support retirement needs, so should have minimal risk exposure.  This team then has 12 other players who focus on creating offense to outscore the other team — a retirement plan could have a similar array of more aggressive investments that conceivably could fund retirement wants.

Table 2 identifies the goal, constraint, issues and guidelines for these parallel universes.

 TABLE 1: A Blended (Hockey / Retirement) Team

  • 2 Goalies
    • Soso On loan from another league: (SSA) Social Security Administration
    • Ben On loan from another league: (DBP) Defined Benefit Program
  • 6 Defensemen
    • Tippy Top-D Pairing: A Treasury Inflation-Protected Security
    • Dewey Top-D Pairing: A Deferred Annuity
    • Connie A mercurial role player, often from a Defined Contribution Program 
    • Proto Insurance Protection: versatile, covering long-term care, longevity,…
    • Dwight Right-Dman: a conservative, a defensive d-man; safety-first
    • Lefty Left-Dman: a liberal, offensive d-man; likes to join or lead the rush
  • 4 Forward Lines
    • E-T-F Line Top Line: Ed-Ted-Fred; a well-synchronized Exchange-Traded Fund
    • B-N-B Line Checking Line: Bill-Note-Bond; neutralize top risks from opposition
    • T-D-F Line Target-Date-Fund Line: become more conservative later in season
    • C-D-C Line Wildcard Line: Commodities-Derivatives-Currencies; limited icetime
  • Coaches
    • Buck Head Coach = Financial Advisor; selects players, manages games
    • Crunch Assistant Coaches: track player performances with data metrics
  • Front Office
    • Gem General Manager = Retirement Manager; aligns team with its Owner
    • Sir Owner: ultimate responsibility for team success; must live with result

 Table 2: Building a Blended (Hockey / Retirement) Team

OBJECTIVE:

  • Build a winning team, from General Manager down to the last player

CONSTRAINT:

  • For the NHL, a team has a salary cap, as well as salary maximum and minimum
  • Unlike the NHL, each “Retirement Team” has an owner-specific salary cap

ISSUES:

  • With a salary cap in place; how to allocate limited funds among the 20 players?
  • Do I have the right General Manager and Head Coach?  Are they overpaid?
  • What if Congress and/or your state  “pull your goalie”?
  • When should you deploy “special teams”, such as a “power play” or “penalty kill”?

GUIDELINES:

  • As a hockey owner, you know that goals are the name of the game
  • Stable organizations that have a clear plan and stick with it tend to become winners
  • No one player can win a championship by himself.
  • Winners never quit, and quitters never win.
  • There is no elevator to the Stanley Cup; take the stairs.
  • Offense creates a headline, but defense creates a champion.

Several parallels can be developed, so let us begin that journey.  Note that our two goalies (Ben and Soso) are on loan from another league, so could be recalled (an involuntary “pulling the goalie”).  In our parallel universe one other league is not in Europe or Russia; it is the SSA (where current forecasts are that its trust fund will be exhausted by 2035 and some politicians have indicated a preference to eliminate the payroll tax; these two sources fund 20% and 80% of Social Security payments, respectively).  The other league also is local, a DBP sponsored by a corporation or state, and similarly constrained to maintain current funding.  Private corporate defined benefit plans are disappearing, and public DBPs are underfunded. Even prior to the coronavirus, at least a dozen state and large municipal funds had less than half the funding needed to meet legally-obligated payouts; another dozen had less than 60%.  State pension debt exceeded $1 trillion heading into 2020.  The disruptions due to coronavirus clearly will exacerbate this shortfall, as state and local budgets shrink, unemployment leads to lower payroll tax contributions, and more people choose to retire early rather than find work.

Following the only completely lost season (2004-05) by an American professional sports league, the  National Hockey League (NHL) imposed a financial structure on all teams.  It requires every team to carry 20 (to 23) players, and for the 2019-20 season the team salary limit is $81.5M.  No player can have a salary less than $700,000 or more than $16.3M.  Assume the starting lineup for our team ((Ben, Tippy and Dewey, and the E-T-F Line) is paid a collective $60M, or on average $10M each.  That leaves a maximum of $21.5M to divvy among the remaining 14 players, an average of about $1.5M per player.  More than 2/3rds of that roster is likely to be comprised of unproven younger players or mediocre (albeit relatively well-paid) veterans.  If your star center (Ted) has an expiring contract and demands $20M to resign, what to do?

Your retirement plan also has a “salary cap”; it is the total funding available to support your unknown number of retirement years.  A portion of that funding is from social capital, which is payments to you and your generation based primarily on payments from the current workforce.  It might be wise to view that source as “players on loan”, like our two goalies, since there is no assurance that either Social Security payments or defined benefit payments will continue, at least at current levels.  There is no requirement that the remaining funding must be allocated among “the 18 skaters” on your roster, but it might be prudent to act as if NHL rules are in force.

Assume that social capital at current levels comprises 50% of your total funding for retirement. You might distribute 30% of the balance in equal payments to your six defensemen, and the remaining 20% in equal payments to your twelve forwards.  If Tippy and Dewey really are a stellar defensive pairing, double your allocation to TIPS (Treasury Inflation-Protected Securities) and deferred annuities – and cut back on allocations elsewhere to compensate.  You also might act as if there are imposed limits on the number of players and minimum player salary.  For the NHL, the current minimum salary equals only 0.86% of team cap — but it is not zero, and all twenty players get paid.  A diversified retirement plan would keep all the players (goalies, d-men and forwards), make sure each contributes unique strengths, and match funding to needs.

Comments 731

  4. En Çok Tercih Edilen Antalya Böcek İlaçlama Şirketi Alc ilaçlama Antalya

    ALC ilaçlama şirketsı en çok tercih edilen Antalya böcek ilaçlama şirketsı olarak müşterilerinin gereksinimlarına cevap
    veriyor. şirketin ilaçlama uygulaması yaptığı alanlar hemen derhal böceklerin bulunabileceği her
    türlü alan oluyor. ALC böcek ilaçlama şirketsının uygulama alanları
    arasında şunlar bulunuyor; restoran, apartman, bahçe, bina, okul, fabrika, otel, şantiye, iş
    yeri, gemi, konut, villa, ev ve toplu mesken oluyor.
    şirket bu alanlarda bireysel ve kurumsal müşterilerine ilaçlama hizmetini titiz bir şekilde veriyor ve
    mekanlarda bulunan zararlı haşerelerin tamamen ortadan kaldırılmasını
    sağlıyor. Bu sayede aynı böceklerin mekanda yine ortaya çıkma muhtemellığını düşürüyor.

    Antalya BöCEK ilaçlaMA

    Reply

  7. Thanks for your personal marvelous posting! I truly enjoyed reading it, you could be a great
    author.I will remember to bookmark your blog and will eventually come back later on.
    I want to encourage one to continue your great writing, have a nice morning!

    Reply

  8. Saç Bakımında Dikkat Edilecek Noktalar
    Saç bakımında bazı püf noktalar vardır. Saçlarımızın daha sağlıklı uzaması için 2-3
    ayda bir uçlarından kestirmeliyiz. Saçlarımızı UV ışınlarından ve kuruluktan koruyacak HC Şampuan kullanmalı
    ve saçları 2-3 günde bir ılık su ile yıkamalıyız.

    A,B,C,D,E vitaminlerini bol miktarda tüketmek saç bakımı için mutlaka gereklidir.
    Hepsini bir anda tüketemiyorsak şampuan ve yağlı saçlar
    için şampuan seçerken vitamin özelliklerine dikkat ederek derimizin vitaminlerden faydalanmasına izin vermiş oluruz.
    Bunun için size önerimiz, Yoğun Vitamin Destekli HC Saç Kremi olacaktır.

    Özellikle kışın saç derimiz kuruyup, saçlarımızın nem oranını düşürdüğü için saç bakım kremi kullanmalı, nem oranını dengede tutarak sağlıklı
    saçlara sahip olmalıyız. Duş sonrası ince ve pamuklu havlu tercih etmelisiniz.
    Uyumadan önce mutlaka saçınızı taramalı
    ve örerek uyumalısınız.

    Aşırı kıvırcık saç yapısına sahipseniz saçınızı duşta saç bakım kremi ile taramalısınız.
    Ama mümkünse duşa girmeden önce tarağınıza yumuşatıcı krem sıkarak taramalısınız.
    Havlu ile hızlıca kurutmak yerine daha narin davranmalısınız.

    Doğal kurumasına izin vermeli, fön makinesi kullanmamalısınız.

    En iyi leke kremi üreticisi olan hc nin leke karşıtı kremine bu
    linkten ulaşabilirsiniz

    Saç Bakım

    Reply

  9. Howdy just wanted to give you a quick heads up.
    The words in your article seem to be running off the screen in Internet explorer.
    I’m not sure if this is a formatting issue or something
    to do with browser compatibility but I thought I’d post to let you know.
    The layout look great though! Hope you get the issue
    solved soon. Many thanks

    Reply

  11. Instagram Takipçi Satın Almanızın İşleminin Hesaba Etkisi

    Takipçi almak, Instagram üzerinde popülerliği yakalamak
    isteyen hesapların kullandığı bir yöntemdir.
    Son zamanların gözde sosyal medya platformlarından olan Instagram,
    her geçen kendini yenileyip güncellemesi ile kullanıcı
    sayısını milyonlara ulaştırmıştır.
    Fotoğraf ve video paylaşma platformu olan zaman içinde firmaların e-ticaret alanına
    dönüşmüş ve insanlara ek gelir kapışı olmuştur.

    Instagram Takipçi Satın Almanın Profiliniz için Önemi

    Popülerlik ya da ek gelir isteyen kişiler için önemli hale gelen uygulamada bu
    başarıyı yakalamanın yolu takipçi sayısına bağlı
    olur. Intagram’ da yüksek takipçi sayısına sahip olmak ile pek çok
    insanın dikkatini çekmek daha kolay olur.
    Instagram’ da doğal yollar ile takipçi elde etmek diğer sosyal medya uygulamalarına göre daha zor olması nedeni ile Instagram takipçi satın al işlemine başvurulur.
    Bu işlem, hesabın daha öne çıkmasını sağladığı gibi daha
    fazla etkileşim almasına da yarar. Etkileşim alan bir hesap da Instagram keşfet alanına çıkar böylelikle daha çok takipçi hesabı takip
    etmeye başlar.

    https://rebrand.ly/takipz

    Reply

  12. Hi my friend! I wish to say that this article is amazing, nice written and include approximately
    all vital infos. I would like to peer extra posts like this .

    Reply

  13. Hc care leke kremi

    HC Pigment-Control’ün cilt lekelerine karşı hızlı ve güçlü etkisi, Kuzey
    Kanada Bozkırları’na özgü bir tarla bitkisi olan Rumeks’ten (Tyrostat™),
    tabiatın yeniden canlandırma
    mucizesi olan Yeniden Diriliş Bitkisi’ne kadar birçok doğal
    ve saf aktif bileşene dayalıdır. Tüm bu aktif bileşenlerin,
    lekeler ve cilt yaşlanması üzerindeki etkileri in-vivo testler ve
    klinik laboratuvar çalışmalarıyla kanıtlanmıştır.

    Tüm cilt tiplerinde, leke problemlerini giderme ve önlemede, cilt tonu eşitsizliğinde, cilt aydınlatmasında, nem ihtiyacı olan ciltlerde güvenle kullanılabilir.

    http://bit.do/lekekremihc

    Reply

  17. Hi, I do believe this is a great web site. I stumbledupon it ;
    ) I will return once again since I bookmarked it. Money and freedom is the best way to
    change, may you be rich and continue to guide others.

    Reply