Monday, April 5, 2010

Americans and Canadians Delusional about Their Government Pension Plans

I have been saying for years that Americans and Canadians are delusional about how much they will receive from their government or corporate pension plans.

My argument has been that it defies logic that a fire fighter or police officer can work for 25 years, retire early at 55 or 60, and then collect nice government-funded pensions for another 20 or 30 years. Taxpayers simply can't afford this.

Where is the money going to come from to support these unreasonable pension plans?

In fact, my creative retirement plan based on my own financing — and no one else's — is much more solid than those of government workers. (That is why I created the webpage Ten Reasons to Never Work at a Real Job — so that you can enjoy your retirement.)

The writing has been on the wall for some time but most Americans and Canadians are in denial about how serious the situation is.

Fact is, many baby boomers, even those with pensions, are in for a big surprise: They will not collect any where what they think the will collect in pensions. Their retirement plan based on taxpayers may in the long run be no better than The Retirement Plan for Idiots

Here is more evidence:

A study released by Standford University in early April 2010 indicates that California's public retirement plans are underfunded by more than a half trillion dollars, equal to about $36,000 per household and far exceeding previous estimates.

The Stanford Institute for Economic Policy Research warns that $360 billion would have to be injected into pension and health care benefit systems immediately just to have an 80 percent chance of meeting 80 percent of the obligations in 16 years.

Again, the $535 billion shortfall estimated by the Stanford report means every household in the state is on the hook for about $36,000.

"That's how much they (California taxpayers) owe to government workers for their retirement benefits," says a renowned expert.

This expert goes on to say, "It's not like they will have to send a check to pay for it. But they will see it in higher classroom sizes, roads that aren't repaired, parks that are closed, fewer policemen, far fewer firefighters and government offices that are probably going to be closed even more than we are seeing today."

My guess is that the California government workers will never collect what they expect because there will be a total collaspe of the system.

The end result will be that these government workers will collect a lot less simply because the taxpayers will not be able to afford what the government workers expect.

In short, these collective agreements with such generous pension plans should have never been made in the first place.

If you would like to retire happy, here are some resources for retirement that may help:

No comments:

Post a Comment