Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Pension-cut Fears: What You Can Do
ENGLEWOOD CLIFFS, N.J. (8/13/2013)--In the wake of Detroit's bankruptcy filing and the threat of pension cuts to public-sector workers and retirees, many Americans are worried about their future pensions (CNBC Aug. 5).
Detroit isn't the only entity with heavy debt and public pension obligations. A number of state and local governments are in the same position, as are some private pensions.
Don't let the unsettling headlines shake confidence in your retirement security. Here's what you can do to take responsibility for your financial well-being:
  • Improve your financial literacy. Do your homework and then discuss your retirement financial planning with a qualified financial adviser.
  • Ask for a detailed annual report from your plan. You may need the help of your financial adviser to evaluate how well the plan is funded. Even if your pension is well-funded, there is some risk that your benefits could be curtailed by a bankruptcy court. Plan accordingly.
  • Don't put all your eggs in one basket. Consider your pension as a part of your retirement funding, not the only source. Think about putting more money into an individual retirement account (IRA), 401(k), or into a public defined contribution plan such as a 403(b).
  • Create a worst-case scenario. Plan for a reduction. How much? In one example, the city of Central Falls, R.I., declared bankruptcy in 2011 and slashed a third of its retirees' pension checks by more than half. Envision how you'll get by if your pension is cut in half.
You might not be able to affect potential changes to your pension plan, but you can manage your expectations and make adjustments so you don't outlive your money. Plan to spend less, save more, work longer, and retire on less income.
For related information, read "Four Key Steps to 'No Regrets' Retirement" in the Home & Family Finance Resource Center.
RSS print
News Now LiveWire
Access to Affordable Mortgages Act passed by Hse Fin Serv. 31-23.CUNA says bill gives CUs reg relief & incr. access to mortg credit.
27 minutes ago
Bill sponsor said will support amndmt to incl. NCUA in the study & delay the agency's risk-based capital plan b4 full House vote. 2of2
35 minutes ago
Bill directing banking agencies to study appropriate capital requirmnts for mrtg servicing assets for nonsystemic banks clears committee1of2
38 minutes ago
The .@FinancialCmte passed #HR4042 and #HR5148 this morning. Both are reg. relief bills and have the strong support of @CUNA
40 minutes ago
FHFA today announced it's extending comment deadline for guarantee fees Fannie, Freddie charge lenders to Sept. 8.
17 hours ago