Excerpt from an article on “Public” pensions:
From: LLRodammer@aol.com
Date: 2/24/2016 9:34:39 PM
Subject: Relying on a Pension to Retire? Food Stamps
Might Be in Your Future
Relying on a Pension to Retire? Food Stamps Might Be in Your Future
Will you need to get a job at McDonald’s when you retire?
If your retirement depends on a pension, you might not have a
choice.
In September, we called
the U.S. public pension system a “slow-moving train wreck.” Public pension funds
manage retirement money for government workers like teachers and police
officers. Part of your tax dollars likely go into public pensions.
These funds have promised to pay a steady income stream to
millions of Americans when they retire. However, many will break this promise...
In short, public pension funds are going broke. Certain state
pensions are laughably short the money needed to pay retirees. For example,
Illinois only has enough money to cover 22% of its promised payments.
Connecticut can only cover 23%...Kentucky can only cover 24%.
According to think tank Budget Solutions, public pension plans
have promised to pay out $4.7 trillion more than they have on hand. Every U.S.
citizen would have to pitch in $15,000 to pay everyone’s promised pension.
BlackRock (BLK), the world’s largest money manager, expects 85% of
U.S. public pensions to fail over the next three decades.
• Private
pensions also face a crisis…
A private pension fund manages retirement money for a group of
non-government workers. Workers pay into the pensions over their careers. When
they retire, the fund sends them a monthly check drawn from the common pool of
money.
According to the Pension Rights Center, 52 multi-employer plans
have told the federal government they are in “critical and declining” status,
meaning they might have to cut benefits to survive. Seven of these funds warn
they may go broke within the next eight years.
Private pension funds are failing for the same reasons as public
pensions: they’re not taking in enough money, and they promised retirees too
much.
• A
major private pension just made a drastic cut…
The Central States Pension Fund is a giant private pension fund.
It manages almost $18 billion for 400,000 workers in 37 states.
The fund recently decided to cut benefit payments by as much as
61%. Retirees currently getting monthly checks for $3,000 will only get $1,180
now.
Last week, The
Kansas City Star reported:
Central States has told its retirees that the cuts are needed
because without them the fund will run out of money in 2026 and be unable to
pay any benefits.
“We simply can’t stay afloat if we continue to pay out $3.46 in
pension benefits for every $1 paid in from contributing employers,” said
letters the fund sent to retirees facing the cuts.
• The
cuts will affect hundreds of thousands of people…
One retiree said the cuts are “going to cripple [his] family.”
Other pensioners are asking themselves difficult questions, The Kansas City Star
reported.
“You know anybody hiring a 73-year-old mechanic?” Rod Heelan
asked... “I’m available.”
Tom Lemmons of Sweet Springs, Mo., and Gary Meyer of Concordia,
Mo., grew up together and have spent recent months talking about how they’d get
by if the pension cuts go through.
“I’ll have to go find a job. I don’t know. I’m 68,” Meyer said.
“It would probably be a minimum-wage job.”
“I guess food stamps. Hopefully not. It would be a last resort,”
he said.
Millions of Americans who count on their pensions will likely end
up with nothing when they retire. Our advice is this: don’t rely on pension
income alone for your retirement. Save and invest a significant amount of your
income. If you invest wisely and build your nest egg, you’ll have enough money
no matter what happens to your pension.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Full post disclaimer in left column. PCN Home Page is located at: http://pcn.homestead.com/home01.html
No comments:
Post a Comment