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Old 05-03-2013, 09:56 AM
 
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New Rule Signals Kiss of Death for Pensions

Great article from an information perspective. For those who are interested in the foundation of retirement funding. I am highlighting one area that has some info I thought all would find interesting.

Quote:
What's replaced pensions since the 1990s have been the employee contribution model like 401(k)s, which are now the main form of retirement plans offered to workers. (Read More: How to Lose $90,000 on your 401(k))


But for many current retirees, pensions are still a key source of income, according to the Pension Rights Center. The group says that only 52 percent of seniors receive income from financial assets—and half of those seniors receive less than $1,260 a year from Wall Street.

And Social Security payments to retirees average only $15,179 a year, roughly two-fifths of their earnings before retirement.
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Old 05-03-2013, 10:02 AM
bUU
 
Location: Georgia
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I don't see this rule change as a big deal (i.e., "kiss of death"). The way I read it, the rule change changes things to the way it probably should have been all along. There are far better mileposts, in the past, that qualify as the "kiss of death" for pensions, imho.
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Old 05-03-2013, 11:14 AM
 
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I'd say many should be much more concerned if they have medicalcoverage as to the consequences of the new heatlhcare bill .Its like anything that responsiblity is shfted from employer responsibilty of part to now government being the middleman.Employers are beig told 'we takeover and this is the stadtard we set'your just pay what we say. I see no benfits until 65 coming for retiree who are not inpovertyand very few middle class who will be able to retire before 65 in future eyars.Espeaily those new hres not covered by terms of employemnt e yat.Its relly no different than what IRA started for retiremnt palns ;it shifted more responsibilty to individuas when government said we exclude these earmnigs from present taxes.Employer then said well government is taking over and started contributing to 410K similar plansas the standard.
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Old 05-03-2013, 11:32 AM
 
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I guess I'm blue collar at heart. I never thought retiring before 65 was a norm or even a goal, because it sounded impossible except for military or police, etc. Is it a real loss in the middle class (or the formerly middle class...) to not be able to retire before 65?
I hear my co-workers talking about retirement in terms of 65. I say, you can retire any time you can afford it, and that's a subjective assessment, to put it mildly.
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Old 05-03-2013, 12:18 PM
 
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Quote:
Originally Posted by brightdoglover View Post
I guess I'm blue collar at heart. I never thought retiring before 65 was a norm or even a goal, because it sounded impossible except for military or police, etc. Is it a real loss in the middle class (or the formerly middle class...) to not be able to retire before 65?
I hear my co-workers talking about retirement in terms of 65. I say, you can retire any time you can afford it, and that's a subjective assessment, to put it mildly.
One of the often not discussed aspects of pensions are the guidelines that define what if any survivor benefits exists. There are different parameters around the concept of death and pensions. If the worker dies prior to retiring are there any pension benefits for the survivor? If the worker dies after starting to collection the pension are there any survivor benefits for the surviving spouse or family? If there are no benefits if the worker hasn't retired yet and passes, doesn't that encourage trying to retire early on to be sure your spouse gets the benefit if you pass and that is an option?
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Old 05-03-2013, 12:58 PM
 
Location: Florida -
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Quote:
Originally Posted by TuborgP View Post
One of the often not discussed aspects of pensions are the guidelines that define what if any survivor benefits exists. There are different parameters around the concept of death and pensions. If the worker dies prior to retiring are there any pension benefits for the survivor? If the worker dies after starting to collection the pension are there any survivor benefits for the surviving spouse or family? If there are no benefits if the worker hasn't retired yet and passes, doesn't that encourage trying to retire early on to be sure your spouse gets the benefit if you pass and that is an option?
Good point. However, there are options. My wife retired with a significant State (School) pension with several options. The difference between the option that extended her pension to cover both of us for our lifetimes ... provided about $10-$12K LESS in annual benefits (more when annual COLA increases are considered). Instead, we chose to max-out her lifetime benefits -- and then buy a term life policy for her that would offset the pension loss in the event of her death ... for LT $4K per year.
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Old 05-03-2013, 01:16 PM
 
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Quote:
Originally Posted by jghorton View Post
Good point. However, there are options. My wife retired with a significant State (School) pension with several options. The difference between the option that extended her pension to cover both of us for our lifetimes ... provided about $10-$12K LESS in annual benefits (more when annual COLA increases are considered). Instead, we chose to max-out her lifetime benefits -- and then buy a term life policy for her that would offset the pension loss in the event of her death ... for LT $4K per year.
Aghhh yes that was one of the discussion topics around the water cooler so to speak. What was the best way to proceed. There are pros and cons as you well know and best of luck with your choice. We opted the other way and the best of luck to us. The key thing was we each weighed the options and made a best for us decision. One of the differences in our case was we both had pensions and the combined amount even with the deduction were more than sufficient.
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Old 05-03-2013, 01:35 PM
 
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I get a state pension Wife gets a state pension. I get ss and wife gets ss....They cant take a dime from us.....lol
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Old 05-03-2013, 02:02 PM
 
Location: Great State of Texas
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Quote:
Originally Posted by bUU View Post
I don't see this rule change as a big deal (i.e., "kiss of death"). The way I read it, the rule change changes things to the way it probably should have been all along. There are far better mileposts, in the past, that qualify as the "kiss of death" for pensions, imho.
Not a big deal currently but down the road it will.
This is an issue the younger crowd need to follow.

From the OP link:

"People getting pension checks this week or next month won't be affected," McBride said. "It's the young person of today that has to worry about getting full pension benefits when they retire."
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Old 05-03-2013, 02:07 PM
bUU
 
Location: Georgia
11,881 posts, read 8,657,053 times
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That's just it, though: The number of private defined benefit plans declined from 170,000 in 1965 to 53,000 in 1997, and of course has continued to decline since then. Less than a third (31 percent) of employees were offered a traditional pension at work in 2010. So what I'm saying is that the rule change is a small speck, with regard to the concern a young person of today would have regarding pensions: It is greatly overshadowed by the fact that they're probably not going to be offered pension eligibility, at all.
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