I Like Guarantees – Part II
I can not watch scary movies. They just haunt me for days after, so I am done watching them. There is a scary real life movie unfolding today, but we can’t turn the channel on this one. The title – “Pension Armageddon.” At least once a month I read an article on the state of today’s pension funds. The level of unfunded obligations is horrifying. For example, the state of Illinois is short $137 billion on their pension promises. If you have a pension I recommend that you look at the current funding levels. If it is less than 60% you need to begin watching it closely. The issue is not that they will never pay you, the issue is, could there be a pay cut in your future. Your retirement plan needs to consider how to add income from other sources if your pension does have an issue in the future. Pensions are a source of guaranteed lifetime income. They are an important part of a retirement plan. I will write on pension choices for payouts and what to consider if you have a spouse in future post.
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