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Pensions in peril: the need to look elsewhere for income 2010-04-08 Private and public pension systems are running massive deficits, and it's likely that pensions will become less important as the twenty-first century continues. Decades ago, workers stayed with one company for most of their careers. In return for employees' loyalty, firms furnished retirees with generous pension and healthcare benefits. And with corporate profits growing practically unchecked, retirement-benefit programs were viable - but that is coming to an end. Some companies are paring costs and finding that they don't have room in the budget for defined-benefit plans. Others, like the major automakers, were bankrupted by their massive retirement liabilities; even now, the New York Times says, G.M. and Chrysler's pension programs are grossly underfunded. And public pension plans are getting squeezed, too, as tax revenues shrivel and healthcare costs soar. With all this going on, pensions are going out of favor; future generations will rely far more on individual retirement plans. If and when that happens, though, finding income elsewhere will be necessary and options like extracting home equity will get even smarter. In the future, retirement will look much different than it does today. But people will still need income in retirement, and home equity will become increasingly valuable.  |
