There is another classification with ERISA known as a Defined Benefit Plan where the employer makes the entire donation to the account and basically “picks up the tab” for the offered retirement benefit. While more prevalent in past years, these have become increasingly rare.

But whether a worker has either plan, many different types of financial service providers will want to advise them on how to invest it, or more commonly known as “rolling it over”, once retirement age is reached. Up until September of 2008 the vast majority of these were simply rolled over into a garden variety IRA (Individual Retirement Account) administered by a bank, credit union or stock brokerage house. They would be, in turn, re-invested in a portfolio of S&P indexed stocks, bonds or mutual funds and were subject to the whims of Wall Street. However, the near melt-down of the economy in the fall of ‘08 changed all this dramatically.

These days a variety of firms and professional assignees are anxious to advise retirees as to which type of roll-over should be employed. While banks and credit unions will still offer IRA’s and CD’s (Certificates of Deposit), other ways to invest with much more diversity are becoming attractive options. Life insurance companies, for instance, can offer annuities. There are now Precious Metal IRA’s as well. And many investment advisers are now utilizing alternative indices to Standard & Poor such as the Frank Russell 2000 Index.

Fixed-rate or Variable-rate annuities can be attractive methods of investment. Folks who had their retirement funds in cash, bonds or annuities back in September ‘08 smiled while their counterparts who had their funds invested in S&P-indexed IRA’s got killed with the severe losses in the Stock Market. A fixed-rate annuity can offer the investor an annual return of 3-6% interest, while protecting the principal from losses. A retiree with $800,000 to invest might find living on $40,000 a year while enjoying principle protection very attractive. Or at least putting a large portion of the roll-over into the annuity as a hedge against a slow market, while taking some higher risks with more aggressive investments might be equally interesting.

It all comes down to the risk tolerances, medium range and long ranges expectations of the retiree. That’s why you need to seek licensed professionals to help design the plan best for the individual. These days many types of companies can offer this advice. Certified Financial Planners (CFP’s), Registered Investment Advisors (RIA’s), Wealth Management Counselors and Insurance firms are just a few professionals who would be happy to assist you. There are strict liability laws to protect investors from getting bad advice from unlicensed persons. In most states, you would be in more legal trouble giving investment advice without a license that you would be for practicing medicine without one.

In addition to the roll-over financial services, union members can benefit from a variety of additional services as well. Younger members will want to invest in such future accounts such as college or vacations funds. Also, mortgages (both traditional and reverse) and estate planners are some financial services that are also important.

The fact that the “Baby Boomers” have become the “Geriatric Boomers” has increased dramatically the desire for businesses that deal with retirees to compete for market penetration. Firms that offer Hearing Aid Benefits, HSA’s (Health Savings Accounts), Long Term Care and Medicare Supplemental Insurance products are just a few of the kinds of companies benefiting from this demographic.

In conclusion, it is more important now than ever before to carefully shop for financial services. That is why union members should only enlist the services of well known, union-friendly firms that they can trust will have their best interests at heart.