#pensions #PublicSectorPensions #PrivateSectorPensions #TeacherPensions
Teachers, police officers, firefighters and other public employees in most places didn’t (and still don’t) get paid much.
The attraction to those jobs, historically at least, were the benefits: good health insurance and a good pension. For teachers, the bonus was having summers off.
Now, governments everywhere are sweating over how they are going to pay for current and future pension benefits for these dedicated public employees. After all, the last thing anyone wants to do is to break a big-time promise to these folks, who are counting on those pensions.
Also, hiring teachers, cops and other public employees is getting more difficult. The private-sector pay is just too attractive – and politics slightly less volatile – to attract enough bright folks into these public professions.
The Atlanta Journal-Constitution published an article April 30, 2019, saying that Georgia lawmakers were moving forward on legislation to put the state’s $78 billion pension system for teachers on more stable footing for the future.
The legislation could temporarily mean a much bigger taxpayer subsidy to the system, which provided pensions to 127,000 Georgians last year, and promises benefits to more than 200,000 teachers and state university system employees in the future, the article says.
The article did not specify what that would cost the taxpayers.
It is not just Georgia that’s having a pension fund issues. It’s virtually a nationwide problem.
Retirement funds are caught in the bind of people living longer and drawing more and more out of the pension system.
Private-sector employers can just stop paying into their pension system, thereby depriving their employees of their hard-earned retirement benefits and breaking the promise they made to them upon hiring.
It’s a bit more difficult for the public sector to do the same.
To top things off, people are not saving for retirement as vigorously as previous generations did. Or, many people are ousted from their jobs well before they reach retirement age, or even qualify for any retirement benefits, presuming such benefits are offered.
In short, if retirement is to be, it’s almost entirely up to me (you). There is certainly Social Security and Medicare, which are having their own problems. Most experts, though, believe these benefits are not in danger of suddenly going away. They could be decreased in future years, they say, but won’t disappear entirely.
One certainly cannot live on Social Security and Medicare alone, and expect a fun-filled robust retirement.
What to do? If you are young, time is on your side. Make saving for retirement a priority. Watch your spending: that daily $5 cup of coffee can add up over time. Put whatever you can out of your paycheck into savings, and as it grows, get some guidance on how best to invest it.
Put a portion, or all, of any pay increases you receive – those are getting smaller and less frequent in recent times – into that nest egg. Remember: the less you see your money, the less likely you are to spend it.
If you are older, and at or close to retirement age, and your nest egg is tiny, you have fewer options. Still, there are some. Regardless of your age, you can check out one of the many vehicles that allow a person to spend a few part-time hours a week in activities that don’t include a “second job.” There is certainly work, but it won’t feel like a job. The additional income could potentially solve any income problems you may have. To check out one of the best such programs, message me.
In short, regardless of where you work, don’t count on the promise of a pension. Such promises are broken every day. Private-sector employees who may have lost their pension benefits may not be as sympathetic to public-sector employees with pensions, and may not care whether you get your promised pension.
To sum it up, it will be up to you, and only you, to secure your retirement.
Peter