Studebaker auto workers found out the hard way in 1963. When the Studebaker Corp. shut down its plant in South Bend, Ind., workers who had been promised pensions saw their hard-earned benefits vanish in an instant. Instead of receiving fixed payments throughout retirement, thousands of employees were forced to take one-time lump sums worth a fraction of what they’d earned. Thousands more received no benefits at all. The Studebaker Corp. had been promising pension benefits to its employees, but in reality it was putting away no money to fund these pensions — and it wasn’t alone.
Last month, we heard the news about the City of Detroit filing for Chapter 9 bankruptcy protection in federal court, becoming the largest city to ever do so. The city's financial crisis threatens the retirement security of more than 30,000 active and retired employees, and almost immediately, lawsuits were filed in state court to protect Detroit's two pension funds during the city's restructuring.
For a person retiring in 1960, Social Security presented a pretty great deal: Pay in during your working years and you could expect to get back about seven times more in benefits during retirement. But today's retirees won't reap nearly the same return on investment. In fact, they're part of the first generation of workers who have paid more in Social Security taxes than they will receive in benefits.
Would you trade some of your pay for better retirement and health care benefits? A new survey from HR-consulting firm Towers Watson found more than half of U.S. workers would.
Retirement age for public sector workers"”government employees, teachers, firefighters, trash collectors"”is becoming a topic of fierce friction nationwide. And the lines between hospitals, insurance companies and doctors are blurring, as the health care law awaits Supreme Court consideration and the 2014 start date of the individual insurance mandate.
Signing up for Medicare has never been easier. Last week marked the beginning of a new way for older adults to enroll for Medicare -- on the internet. Patricia Barry reports:
Search AARP Blogs