Children of Soldiers Fund

If you are planning on using your pension during retirement, you may be in for a HUGE shock. Just like those folks who were told that the Government would never tax Social Security, you will be in for a surprise. But why?Pensions come – normally – in two flavors. Funded and unfunded. This is a “pay as you go” system which looks and feels very similar to Social Security. The current retirees are paid from the current workforce.The city of Pittsburgh PA, for example, has promised its workforce (police, firefighters, municipal employees, etc.) a total of $524 million in pension retirement funds. So far, the city has set aside exactly $0.It is assumed with an unfunded pension that when individuals retire, there will be sufficient future revenues to cover all promised liabilities. These projections represent a confidence game – a “trust me” scenario – if you will. What happens if the city’s future revenues are not enough to cover promised pensions? Don’t ask.Moving on…many private companies have the same problem.For those who have a funded pension – that is, the employer sets aside money over a period of time to cover promised benefits – have an