Over the past year or so, I have been teaching in my educational workshops that private and government pensions are going away. Here is just the latest example of how this prediction is manifesting itself.
In a study published in April, the Manhattan Institute for Policy Research found that the 59 pension plans that cover most teachers in the United States are underfunded by $332 billion. However, that estimate is based on using an eight percent discount rate. When the researchers applied the same standards private plan are required to use – that is, a six percent discount rate – the shortfall is $933 billion – three times the original estimate!
The study concluded that once states fully realize the true shortfalls in their plans they will likely take action to contain future benefits. One option they will consider is to move away from the defined benefit that plans provide today, and/or reduce benefits to future plan participants.
The ground truth here is that the rules of retirement are changing. The concepts that have applied to retirement in the past can no longer be counted on for those of us who will be retiring in the future. America's aging population, the general decline in government revenues and corporate profits combined with devastating losses in the stock market are causing both government and private employers to make drastic changes to their pension benefits. In the short term, this takes the form of underfunding the plans, not funding the plans at all and eventually, not offering any pension benefits.
What's the answer? Now more than ever, we must take responsibility for designing and funding our own pension plan. We can no longer assume that our employer will take care of this for us. That's why I have developed the Personal Protected Pension Plan™ inside of our Hidden Wealth System™.
This is a plan where your money grows at a guaranteed 7-8% tax-free rate, is immune to market loss and then is transferred to you (or your heirs after you pass), tax-free! You can even build-in inflation protection for your retirement income so that, as inflation rises, the income you receive from your Personal Protected Pension™ increases, thus protecting you retirement lifestyle. We can even show business owners how they can build a Personal Protected Pension plan for themselves!
Want to learn more? Visit the Personal Protected Pension Plan™ section of our web site at:
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