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The following quotes from this thought provoking article Pensions: Angry populists' next target - Sep. 30, 2010 by Nina Easton in Fortune puts into some perspective defined benefit pension or government managed retirement programs.
"In these dog days of our Great Recession, no one is feeling especially lenient toward taxpayer-funded fat cats. But what if that "fat cat" isn't some Wall Street banker (most of whom have paid back government loans with interest) but rather the retired small-town city manager in Northern California living on $261,000 or the 40-year-old former New York City cop who gets to collect $100,000 a year for the rest of his life"
"In August the Los Angeles City Council learned that pensions and health benefits for retirees will gobble up a third of the city's general fund -- up from 8% -- in just five years. In Orange County the chief executive predicted that pension requirements in 2014 will consume about 84% of the county's law-enforcement payroll. The underlying threat? Lay off current cops to pay for the vacations of retired officers."
"The story will only get worse because pensions nationwide are underfunded."
Bottom line they are a disaster! Why should you ever get out more than the value of the contribution you put in?
Why should you get out more? Return on Investment for all the years you put money in and it was invested. Why wouldn't you get your ROI? Isn't that why you did it. Most state pension funds have significant reserves and can pay our for a number of years. The shortfalls are for the out years way out if their ROI doesn't meet the expected return. Much of the state pension reserve funds invest in bonds that build roads, schools, hospitals etc. This has been discussed time on time in here and you may want to do some searches and rebirth the threads if you want. However this is a thought!
March 8 (Bloomberg) -- The Federal Deposit Insurance Corp. is trying to encourage public retirement funds that control more than $2 trillion to buy all or part of failed lenders, taking a more direct role in propping up the banking system, said people briefed on the matter.
Could be your local bank saved by your state pension fund and their sizable reserves.
With most of the long-term unemployed being over 50, I think that the early retirement age, should be lowered to 52. Why wait until you're 62, to start collecting Social Security. If you're a taxpayer, and have paid Social Security taxes for decades, then shouldn't you have the option to start collect Social Security benefits, at 52?
Since age discrimination in the workplace is so widespread, and with older workers, having such a hard time finding employment now, then lowering the retirement age to 52, might be a viable solution. Feel free to give me your thoughts and opinions, on this issue.
This is 4 years old:
"The government has made promises that it will not be able to afford the costs of the current pay-as-you-go system in the near future. There were 16 workers to support every one beneficiary of Social Security in 1950. This ratio has dropped to only 3.3 workers to support every Social Security beneficiary. Baby boomers will begin to retire in 2008, just one year from now. As well, benefits are scheduled to increase dramatically in the next few decades, and people are expected to be living longer. At the time that today’s youngest workers turn 65, there will be only 2 workers to support each beneficiary. If the system continues on its current track a 30-year-old worker of today will experience a 27% benefit cut when he or she reaches the normal retirement age of 65."
Why should you get out more? Return on Investment for all the years you put money in and it was invested. Why wouldn't you get your ROI? Isn't that why you did it. Most state pension funds have significant reserves and can pay our for a number of years.
The "value" of the contribution is not the amount invested but the value at a point in time.
The problem with most state pension funds is that they have massive contingent liabilities. With some of the examples quoted in the article people will receive a lot more pension than the value of their contribution (and in some cases more than they ever earned!).
Like some of the other posters mentioned.... it will never happen. The USA government is broke as it is. the SS is in a way a pyramid scheme. I seriously doubt there will be anything by the time I am eligible to get SS benefits. It's sad...
Never going to happen 'but it will proably be raised.
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Lowering the age
