When You Want Something Done Right, You May Have to Do it Yourself

September 10, 2010

Over the last few months I have talked to a lot of people who are concerned that their company’s pension plan has changed for the worse.  These are people from many different employers all across the country.   Many others have seen an employer’s pension plan get frozen, terminated, or taken over by the PBGC.  What was just a generation ago almost a “given” has become increasingly rare, and even when it exists there is ever increasing skepticism about the long term viability of the pension plan.  So, what can be done?

First, if you have a pension…be thankful.  Second…be prepared to see it change between now and retirement.  (Even if you are retiring in the not too distant future.)  Third and most importantly, take control of your financial life and get yourself in a position where no matter what the company does, you can do it yourself.   OK, that sounds like reasonable advice, but how do you do that?

In order to do it yourself, there are some things that would be incredibly helpful.

• Have a plan!  Think big picture…Understand when you want to retire, how much you’ll spend, how much income you will have, and the financial resources available to you.  (Get help from a financial planner if needed)  Determine how much you need to save between now and then.
• Get into the details:  Understand your current budget and where your money goes.   Where can you save more?  Where should it go? (Stocks?  Bonds?  Cash?)

When you have a fairly clear vision for your future, you can take actions that will help you reach your goals.  Start with your big picture, dig into the details, and take control of your financial life.  If your company pension goes away, gets frozen, gets taken over by the PBGC, or just never existed in the first place – it won’t matter because you will have prepared yourself for the future with or without your pension.