State pensionsA

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linda's picture
linda
Status: Member (Offline)
Joined: Mar 17 2008
Posts: 1
State pensionsA

Hi,

My husband recently was let go due ot outsoucing. He has a new job,but wondering how safe that pension money is.  He wouldn't start collecting on it for another 5-10 years when he is 65.   We only have about $50,000.  Would LOVE feedback on this subject.

Thank you.

Linda

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2219
Re: State pensionsA

In my opinion, pensions (whether public or private) are going to see huge challenges in the immediate future.  Just as I don't expect to see a dime of Social Security (I'm 45 y.o.), if I had money in a pension I wouldn't expect it to be there either in 20 years.  

(full disclosure:  cashed out my IRA & 401[k] a long time ago)

Viva -- Sager

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1207
Re: State pensionsA

Hi Linda,

As much as I hate to say it, it's probably best to not count on the pension being there when you two retire.  If it's still there that's wonderful.... but there's entirely too much uncertainty that far out (5-10 years) to be able to count on it as a certainty.  As for me it will be at least 30 years before I can likely collect a pension from my current employer (I've put in enough time to be 'vested'... as if that will mean anything), and as much as I'd like to hope it will be there, I'm not counting on it.  Your best bet is likely to plan for a retirement without that income.  Maybe that kind of retirement will involve pooling resources with friends or children or relatives, maybe not.  But whatever you do don't count on the pension as a certainty, and keep some other sort of savings as a backup.  There is a wealth of information out there regarding pension plans and their relative shortfalls (if any).... who knows, your husband may have the fortune of being part of a relatively well-managed and stable pension.  I'm sure there are still some of those out there  Smile

- Nick

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
Re: State pensionsA

Linda,

If I were to place odds upon it, I would bet that his pension pay-out will be significantly reduced from what is being promised at the present time.  Corporations have realized that they can raid pension funds with relative impunity and that's exactly what's going to happen.  State, county, and municipal workers' pensions are, for the most part, significantly underfunded as well.  Because it can "print" money, perhaps the only pensions that are safe, are those of the federal government and public outcry may even cause those to be reduced.  It's very sad but that's the reality of the situation. 

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