Most people would think that this question of whether your employer pension is safe or not would be unthinkable! People have worked all of their lives. They are depending on the employer pension during retirement. They are more at risk these days than they ever were before. Unions had negotiated pensions for their union members. Now retired people are finding that the same companies are not able to fund their pensions.
In unprecedented moves, both public and private employers are raising the alarm bells. Employee pensions are at risk. Pensioners who have been retired for sometime may experience a 50% drop in their monthly pension checks. This has many people worried. Many feel that they may have to go back to work or move in with the kids.
Several governments around the world have cut or reduced pensions to pensioners. In the United States, several cities and states are reducing or eliminating pension checks. The majority of people are still okay in terms of receiving the monthly pension check. However as cities go bankrupt, State governments experience increasing financial difficulty. The only way they can turn is to reduce pension payments to their pensioners. This puts many people at extreme risk in their old age and during their retirement years.
Employer Pension – Diversity
One of the key building blocks for pension plans, and for investors saving money for retirement is diversity. Financial advisors will tell you to never place all of your investment in one company, one stock, or one investment vehicle. Diversity is the only protection you have against a particular company stock becoming worthless.
The same thing applies to pension plans. Company pension plans should be diverse. They should be managed properly but the sad reality is that this is not always the case. As a result more and more people are finding that they should also be planning their own investment strategy. The pension plan is only one part of their income during retirement years.
It is too late for those people who are retired and in their late retirement years. Consumers who are still working have an opportunity to set aside money for the retirement. Regardless of whether they expect to receive unemployment pension or not they should start doing so now.
Building up savings which can be used during your retirement years provides you with protection. This a big bonus particularly if your employment pension comes through. Think of it as an insurance plan. It will enable you to have the quality of life that you would like to have during your retirement years. There will be much less stress on you as well. You don’t need to worry or be concerned about losing your government pension, your employment pension or your union pension!