Pension Problems, They May Not Be Guaranteed

Pensions are great…. for the lucky few that have them

If you are going to get a pension that is great but increasingly rare. Consider yourself lucky. You should still have supplemental funds like 401K/403b, IRA and Roth IRA.

Pensions are not fully guaranteed. Usually they are backed by the government if the company goes under from their pension guaranty fund.

State and local government pensions could be cut if the city or state declares bankruptcy. This happened a few years ago in the City of Detroit when the local government went bust and did not have the tax base to pay all the owed obligations. The judge ended up cutting the payments to all the retirees so that the city could afford them.

The moral of this story is have a backup plan or two.

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