Do you have a retired mom or a dad over 65 years old who
worked for a private company? If yes, they—unlike you, if you are under 40
years old— might have a pension called a defined benefit plan. This was true of
30 percent of all workers in 1978—but only true for 3% in 2011.
Increasingly,
employers have been unable to fund those benefits. When that happens, a semi-governmental
agency called PBGC [Pension Benefit Guaranty Corp.] pays up to about $50,000 in benefits per year.
Now comes
news that PBGC might run out of money (compare to pension plans for public
employees in Illinois). What’s the next step? PBGC is mulling over a request to
Congress to raise taxes to fund the shortfall. Currently, only employers who
have these plans pay premiums to support the pension insurance fund. Congress
isn’t going to raise taxes for pensions, so what does that mean? If you have a
parent tied to one of these plans, you might start to save money to take them
into your home and into your budget. For more: click here.
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