Last week, I recommended that pension holders do some homework on their company or government entity and make sure they had the financial strength to honor their pension commitments. This was especially important if your pension benefit happened to be above the PBGC guaranteed limit and if your retirement savings plan were important to you!
In terms of government pensions, I recommended that you investigate tax revenues and compare it to city budgets, and also examine the debt levels of your employer (if you work for a city, county, state, or other gov’t entity). If you haven’t gotten started yet on the research, here is a softball for you to help you with your pension research and overall as part of your risk management plan in your financial plan for retirement.
The AP put out this pension “map”:
It points out which states have a funding shortfall in their budgets. Why do you want to know this? States with bad budget shortfalls can not so easily help prop up weak pensions, and certainly can’t help out troubled cities so easily.
I would recommend you start here and work down to your entity (if you work for local gov’t) and determine how financial stable it is. As a retirement planner, I would recommend you consider this research soon.
Thanks for reading!
More About Chris Grande, MSIM, RMA, who focuses on financial planning for retirement and analyzing retirement plans including pensions, 401k, IRA, and 403b
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