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Show January 1968 UTAH FARM BUREAU Page 5 NEWS Retiremenf Bonds The U.Sk Government sells special bonds for use in HR-1retirement plans. Similar to savings bonds the yield is r datively low, but the investment risk is as low as anything available. Pure safety with modest earnings is the main attraction of this plan. 0 Your Employees e If you have a employee that has been with you for more than three years, you must also provide a retirement plan for him, if you are to qualify for die tax shelter provisions of the HR-1plan. Hie type of meet must the If the man test. selected "prudent plan plan is riskier than would be selected by a mythical "prudent man", it won't meet the test for the HR-10- . Your HR-1program should provide maximum future benefits for both you and your employees. full-tim- 0 0 Market Investment Mutual Funds Final Recommendation Mutual funds offer die small investor an opportunity to own a portion of a fund having a wide diversification of stocks and professional management The fund uses money supplied by fund members and buys stock in a wide variety of companies. Some of the stocks are in companies that show quick growth and high earnings. Other stocks are invested in solid, conservative companies that show steady earnings year after year. This diversification provides income for fund members even though the market fluctuates. The major advantage of mutual funds is that you can invest a smaller amount of money than ordinarily necessary to achieve diversification of investments. Another advantage (and this is true of most stock market investment) is that it provides a hedge against inflation. As the price of everything goes up, your ownership of securities goes up also. Many funds carry a commission paid by the shareowners, others do not. Over the long run, most cost about the same. If, however, you need to sell your shares within the first couple of years in the fund, a fund (one that charges no commission) would be an advantage "no-loa- d" Most mutual funds over the past ten or fifteen years have shown a on the investment There is no guarantee, however, yield of at least 0 that you will get your money back. Hie funds are considered safer than many investments, but they don't offer the ironclad safety of a retirement annuity. Hie annuity will yield less than mutual funds, but assures the policyholder of getting his money back, regardless of the condition of the stock market 9-1- Monthly Investment Plan For the more sophisticated man with a background of experience on the market a plan can be worked out with a bank through an approved trust to invest in certain stocks. The fund is worked out with the bank as administrator and at least $2,500 a year would need to go into the fund. Most brokers recommend that an additional $2,500 voluntary (non sheltered) contribution go into the fund. With this kind of a plan where ownership of securities rests with the individual rather than a fund, an account of around $25,000.00 would be necessary to achieve diversification. This individual type of plan is not recommended for the average inof sources who other retirement It is suited for large operators have self-employ-ed come. Other Programs Bank Savings Retirement money can also be placed in a savings fund with a bank. Arrangements can be made with a banker (most of whom are very familiar with the provisions of HRrlO) to place the money in savings to build retirement income which can be paid out in monthly sums during retirement from a trust Once the money is placed in such a fund it can't be used for other things without incurring a penalty in taxes. Many investors feel that the yield in such a plan is too low. program would seem to be the best program for the individual A foundation of protection against death or disability should be included in case of loss of earning power before retirement A certain amount of investment should be placed in a plan that will provide a hedge against inflation. And finally some funds should be placed in a plan with a high degree of safety of investment Your program should be tailored to your situation and circumstances. You should consult someone who is qualified to advise you on the subject Your lawyer can set up almost any kind of an approved program. Also familiar with the HR-1provisions are your Country Mutual Life agent and your banker. A balanced self-employ-ed 0 |