Are Pensions up for Grabs?

According to many studies, pensions of all kinds are assuming 8% average returns and taking 10 times the risk they have in the past in order to provide the required pension incomes.

As we have seen with Detroit, the latest example of reduced pensions and lost cost of living benefits, it is troubling to see that some company pensions already promised to retirees are seriously underfunded.

The promises made to pension holders are not being kept. Congress has proposed, for the new budget, federal workers contribute more to their pensions. Even military pensions are being cut in the budget proposal.

Many pension recipients do not realize that legislation has been proposed to cap the maximum amount in pensions. Other things being proposed include forced contribution retirements, termination of the inherited IRA benefit, no step up basis, no capital gains, only ordinary income tax, and many more issues. With the budget deficits at every level of the government, it's quite possible that pensions may be raided so that taxes will not be raised until they have to.

More and more we are seeing these pension issues in the news, and we are seeing many private corporations offering retirees a pension lump-sum buyout.

If your employer is offering a lump-sum buyout, have you done an analysis on what makes the most sense for your situation, to take the lump-sum or to take the monthly pension plan offer? If you haven't spoken with a retirement planner and you feel it is time, give us a call at (775)853-9033.

Review it regularly and increase your contributions if you need to and if you can afford it. - See more at: http://www.consumerhelp.ie/getting-most-from-pension#sthash.R6BBT87O.dpuf

Review it regularly and increase your contributions if you need to and if you can afford it. - See more at: http://www.consumerhelp.ie/getting-most-from-pension#sthash.R6BBT87O.dpuf

Review it regularly and increase your contributions if you need to and if you can afford it. - See more at: http://www.consumerhelp.ie/getting-most-from-pension#sthash.R6BBT87O.dpuf

Review it regularly and increase your contributions if you need to and if you can afford it. - See more at: http://www.consumerhelp.ie/getting-most-from-pension#sthash.R6BBT87O.dpuf

This commentary is not intended as investment advice or an investment recommendation. Nothing in the commentary should be construed as a solicitation to buy or sell securities. Past performance is no indication of future performance.

Chris Abts