Strategies Taken For Retirement 

Retirement is something that most individuals will go through and must prepare for early on. The amount of different routes one can take to eventually get to their goal however is complex, and often times requires a financial planner in order to ensure comfortable living once work is over. A number of different people across the country found their answer by working for a respectable company that offered fair pay, added benefits, and a pension or stock program. This company for hundreds of thousands of citizens was GE.

 

Methods Taken by GE and the Results

At the time, GE was untouchable and earned gains that convinced lots of investors to buy stock in the company. As the Wall Street Journal article puts it, employees knew that getting a job for GE was a job for life. What a lot of workers really enjoyed though was the satisfaction of the pension plan on top of the stock program put in place to make retirement as pleasant as possible. Unfortunately though, the good fortune for GE would be halted and has left many former employees worried about whether or not they can keep their promises.

Poor investments from the company’s management along with problems in pivotal markets has put GE in a tough position. While most of their businesses are doing well, their revenue stream still is not enough to cover all the losses. In order for GE to keep the pensions intact, they must borrow an additional 6 billion dollars which is disheartening to hear for anyone that relies on it as a source of funds. The unfavorable news has also sent GE’s stock price plummeting and hurt their former workers even more who had bought into the stock plan. In one situation, a gentleman had seen his portfolio’ value plummet from $190,000 to just $70,000.

 

Lessons Gathered

What GE can teach everyone who is looking to invest for retirement is that diversification is key. The future of any company is always uncertain, so do not rely on the performance of today to carry over to tomorrow. Pensions are always a nice security to have, but if the company cannot pay them, what will that mean to you once you are a senior citizen? Making sure you have a number of different stocks is important and could have potentially saved a lot of headaches for GE employees had they invested into other companies too.