Pensions in the Pandemic: The Rubber Band is About to Break!

Pensions in the Pandemic: The Rubber Band is About to Break!

Asurea: YOUR Retirement Knowledge Bank is OUR Duty!

At Asurea, we take our duty to build your retirement knowledge bank seriously.  In this series, we’ll analyze not only pensions as a whole, but also public and private sector pensions specifically.  Here in Part 1, we focus on the public sector.  In Part 2, we’ll consider private sector pension trends, scrutinizing General Electric in a case study of their pension phase-out.  Both parts explore the effects of COVID19’s on pensions overall.  

Public Pension Funds Pre-COVID19

Across the country, the government has a ticking time bomb in the form of public pensions.  COVID19 has it ticking faster.  From tiny small-town programs nationwide to the biggest state public employee pension systems,most were in jeopardy before the pandemic. 

COVID19's Effect on Public Pensions

Since the pandemic, ALL have been dragged down by massive market collapses and volatility.  Pension systems thought to be in the clear before COVID19, such as California's CalPERS, have been bowled over by market impacts.

Sky-high unemployment and shuttered businesses result in tax revenue nosedives.  This, in turn, will further worsen public pension funding.  But, to what degree public pensions have been hit is indeterminable, because quarterly reports are not required of public pensions. 

Public Pensions:  "The Rubber Band is About to Break!"

As Maria Pappas, Cook County, Illinois Treasurer put it, tax collections cannot fix the yawning gap between pension obligations and pension funding.  As she explained, this is because, “The people have no money… It’s like a rubber band has been stretched too thin.  What I’m telling you is, the rubber band is about to break!”

Diversify, Secure, and Stabilize Your Portfolio

Increasingly, we as individuals must take charge of our own retirement planning.   Diversifying our portfolios can include untapped options such as retirement-funding life insurance, annuities, and the Debt-Free Life Program.  For those who prove eligible, advantages over IRAs and 401Ks include unlimited contributions, no maximum income, and early borrowing options without tax penalties. As with Roth IRAs, contributions are made on a post-tax basis. Plans can be structured such that retirees receive principal and cash value growth UNTAXED.  

In Part 2 of this 2 Part Series, we’ll explore  trends in private sector pension systems, how COVID19 affects pensions, and concrete actions YOU can take to diversify, secure and stabilize your retirement portfolio.

To partner with a broker who will help you balance and diversify your retirement, contact Asurea.

Asurea:  Securing Your Future for Generations to Come!



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