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Wealth Blog

History is made in Detroit once again

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Joe Wirbick
Joe Wirbick - (Photo / Submitted)

On Dec. 3, Detroit made history by becoming the largest municipal bankruptcy in our great country's history.

Gov. Rick Snyder finally won his long and hard-fought battle to throw in the towel and declare, "We are broke."

Citing $18.5 billion in city debt as the cause, Gov. Snyder might have saved the city from bouncing many checks but might cause many of its former loyal employees to bounce many more.

With this announcement, the future income of more than 23,000 retired municipal workers is in doubt. One of the most frightening things to happen to a retiree just might be happening soon to many of Detroit's finest.

Today's retired population cites "running out of money" as the number-one concern during retirement. This might happen if you don't plan well enough ahead of time and save those dollars early.

However, what do you do when an income that has been promised to you for decades is suddenly in question?

This is not the first city for this to occur. In fact, since 2010 a shocking 38 municipalities have attempted to declare bankruptcy.

With Detroit successfully making a bid for Chapter 9, we might see many more cities of this size seeing this as a viable plan of action.

If this occurs, I have no idea what will become of the hundreds of thousands of retirees who depend on their monthly pension checks.

I know I have said this before, but I will say it again and again: You need to plan! You need to do it now! You really can't wait. You can't hope that someone will take care of it for you.

I hate to say it, but thankfully, pensions are becoming rare. That way many more people know ahead of time that it is completely up to them.

Please don't think that Social Security is a viable retirement solution. If it actually is still there for many of you decades from now, great. Just don't count on it. Do not rely on it. Plan as if it isn't there and, if it is, then your plan will be that much more secure.

The new year is only weeks away. Get out your planners, your iPhones or wherever it is you take down notes. Write "I will begin planning my retirement NOW!"

It is completely up to you to start the process. However, there are many qualified professionals out there to help you finish it. You should enlist their help.

Hire a financial planner and a tax professional and get them to work together. This might be the best new year's resolution you make and keep. This one will pay dividends to you well into the future.

Joe Wirbick

Joe Wirbick

Joe Wirbick is the president of Lancaster financial services firm Sequinox. Joe specializes in retirement planning and distribution. Tax information is provided for informational purposes only.

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