2 Baby Boomer and Pension Facts

When most of us baby boomers entered the workforce we fully expected to have a pension when we were ready to retire. Well, that is not the way it turned out. Pensions are about to be wiped out like writing on the beach.

Here are a couple of facts to think about.

Fact #1

Only 16% of Baby Boomers have pensions.  As you could imagine, the vast majority of these baby boomers are state employees. I recently, had a client who was in their early 30′s and was thinking of leaving state employment for the private sector.  Her grandparents were explaining to her that if she reached ten years with the state government she would be vested and the state would pay for her health care when she retired.  I had to laugh!

Fact #2

In 2010, it was estimated that the 50 states will owe a collective 5.17 trillion dollars in pensions but will only have 1.94 trillion dollars to pay it. The data comes from work done by Northwestern University and University of Chicago professors who combined the pension liabilities for all 50 states. State governments are required to balance their budgets but the way many have gotten the books to balance over the last 20-30 years is to not fund state pension plans.

I was working for IBM in the late 1990s.  IBM changed our traditional pension plan to a cash balance plan.  They then converted all of us who were over 40 back to the traditional pension plan to avoid age discrimination legal action. I had a discussion with a friend where he stated that since they gave it back to us they could not take away again.  I laughed because sure they could and did.

I left IBM within a year and took the pension amount that was offered when they converted us to the cash balance plan.  I did not trust them anymore. IBM stopped funding the pension plan in 2008.

How about you?  Do you have a pension plan from work?  Do you expect it to be there when you retire?

If you have not read previous Baby Boomer Fact posts, they can be found at:

• Retirement Planning
• Labor Market
• Social Security
• Mortgages and Home Ownership
• Medicare and Life Expectancy
• Parenting
• Relationships with Grandchildren
• Infographics
• Labor participation, unemployment and long term unemployment rates
• Homes

If you are interested in receiving the Baby Boomer Fact Sheet  please click here! I should be completed this week!

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If you are interested in learning more about career change for Baby Boomers please visit my website.

Marc Miller Career Change Coach