Clueless about pensions

[question everything]

I admit, I did not follow the New York transit strike closely... except to selfishly be glad that we visited NYC this time in both 2003 and 2004.

But on CBS News there was a report that it was about pensions, not about salary.

And, of course, they added that most young people will never have pensions.

OK, agree that most of us need to save for our own retirement because even if we work for employers that do provide pensions - by the time we retire they may no longer exist. Yes, even GM.

Except... this is OK for someone just starting out, or even someone in his/her 30s. But what if you are in your 40s and 50s and you did not put money aside because you were promised pension?

Just as the excellent PBS Frontline story said: they change the rules in mid game and we are supposed to "adjust?"

[Warpy]

1. Most people in their 50s had to rely on that pension

because we were the generation that bore the brunt of double digit inflation, double digit interest rates, double digit unemployment, and then a double digit delcine in real wages after the mid 1970s oil shocks (which was blamed, you got it, on greedy labor). For much of our lives, we've faced inflation followed by declining wages, and there is no way to save under those conditions.

We have been told that if we'd saved $2500/year since we were 20, we'd be in fine shape to retire now. What those chirpy numbers crunchers fail to realize is that most of us made barely that when we were 20 and needed nearly all of it to live on.

When they tell me how I could have saved $2500 out of a $2675 annual salary, I'll listen. That is what I made at the age of 20, and it was considered a good wage for someone just starting out.

There is a real time bomb set to explode when those of us in our late 50s start to retire. Our medical benefits are already gone, and most of our pensions have never been adjusted for inflation. The combination of a small pension with social security, for those of us lucky enough to have worked somewhere to accrue a pension, will probably not be enough to live on, and we will lose everything we ever worked for, just sell it off for enough money to buy food. Now they're even yowling about paying us the social security we've supported all our lives.

I'm telling you this as a cautionary tale, all of you under 35 who think you have the world by the tail. If there is a way these bastards can skin you, they will. They have made our lives miserable and have robbed our futures. We have no hope left. They'll do it to you, too.

[susanna]

2. "They change the rules in mid game and we are supposed to "adjust?""

That's about the long and short of it.

I am in my 30s and have saved seriously since my 20s because I knew I would have no pension coming. I work "temporary" jobs but am relatively skilled and make a decent wage. My husband, 45 years old, hired in with a firm that promised pension and full health insurance in retirement. So we saved with those things in mind...

That said, we were just given the news that part of his retirement benefits - health insurance - will be phased out for employees under 46 as of this year. Since he's 45, tough luck for us! So now we have to: 1) readjust our savings plan; 2) pray for no health problems or other calamity to befall us pre-retirement, so we can 3) set up a health care fund that may purchase catastrophic insurance in our retirement. (Of course we have both admitted to one another that we are probably not going to be able to actually retire.)

Luckily my husband never truly trusted the pension and has a healthy 401(k) in addition to his company-funded pension (which will probably be the next thing taken away). I know we are lucky considering all the people who have not been able to save much of anything, but when you are given a set of rules and do your best to follow it, it really scares you to realize that essentially, in this corporate, profit-driven culture, you're just plain and simple on your own.

[question everything]

3. This is horrible

and, I suppose, they "rely" on state Medicaid to take care of its employees - just like Wal-Mart.

I think that when employers lay off people, their subsequent payment into the state unemployment fund rises. I think that something similar should be when they no longer provide health insurance.

[susanna]

5. Truthfully? I feel somewhat lucky!

I know there are far worse situations out there. We at least have the opportunity to save some more, but yes, it's a gut hit when you have been expecting X and end up getting Y. The problem is what the original poster said - you save according to the information you have. That is the problem in this crazy world...when those assumptions change, you have to hope you are in a position to mitigate the fallout.

And do not get me started on WalMart! Grrrr....I feel terrible for people whose towns have lost all their mom and pop shops to that monolith and have no choice but to shop there. I shop blue as much as possible or find local businesses that need my patronage.

It's a crazy world these days...

[Historic NY]

4. I retired out on my pension in June.......

NY State has one of the largest and most profitable pension system in the country it covers police & fire, teachers and other municipal workers. I got hurt and cannot return back to my job of almost 31 yrs. The town I worked for contributed to the pension plan over the years, its based on an average of your final 3 yrs salary. At one time people would load up on overtime but now its controlled on just how much of that counts. Many workers can retire after 20 yrs service, which does produce some savings to the municipality with new replacement workers a lower pay scale. Without the pension now backing me up I'd be in bad shape. I survive on it but they are really slow in processing disability claims these days. Mostly public service pensions are never messed with. I've see trends in some states where the funds have been grossly mismanaged. The state Comptroller is the sole caretaker of $126.1 billion in the pension funds.

http://www.osc.state.ny.us/pension/