Kodak - another reason to diversify

[Chuckanut]

If anybody still needs a reason to diversify their sources of retirement income this move by a bankrupt Kodak will provide some incentive. As I read this article, the basic pension is still secure, but some of the other benefits such as paid medical and special benefits for surviving spouses are being chopped.

Kodak retirees lose health, welfare benefits

I still like the idea of a three legged stool: SS, Pension/401K, and personal investments. The goal is to be able to pay for the basics of a comfortable lifestyle on two of the legs in case one fails.

 

[easysurfer]

Thanks for the link. I have a friend who I believe her father retired at Kodak. At least he is medicare eligible in age, but still a bummer for sure.

 

[REWahoo]

One of my deceased brothers retired from Kodak and his 80 year old widow will lose her Medicare supplement, dental and drug coverage Jan 1. She was worried she would also lose his survivor pension benefit, but he took the "Joint & Survivor pension benefit" option when retiring and she will not see a drop in her income. Fortunately for her, Kodak purchased an annuity from a third party (Met Life) which paid his pension and her survivor benefits.

 

[Chuckanut]

She was worried she would also lose his survivor pension benefit, but he took the "Joint & Survivor pension benefit" option when retiring and she will not see a drop in her income.

Good point REWahoo. The 'normal' Joint and Survivor benefit that retirees can choose continues on, but apparently there was some type of special survivor benefit (from 1995 and earlier) that will no longer be paid.

 

[traineeinvestor]

Risk concentration is one of the reasons why I am very happy not to be relying on a defined benefit scheme to fund my retirement.

 

[Koolau]

Certainly, it behooves a prospective retiree (especially an early one - i.e., anyone not ready to go on Medicare) to have alternatives to "promised" employer benefits. Having said that, Kodak's pension appears to be safe (and the back-up is the PBGC). So, for instance in my situation, I took an up-front larger pension at the expense of a smaller "promised" survivor benefit. The pension should keep coming even if my old Megacorp should find a need and way to weasel out of the survivor's benefit. My old Co. does provide medical insurance for retirees (coordinating with Medicare at 65) and THAT benefit was the one I was (and am) most concerned about. To provide a back-up, I increased my "number" substantially before ER. The back up is to then take out a Medicare supplement (at my own expense) should the worst happen. BUT, I planned for this possible change-of-plans. To me, it's all about having an alternative plan. If you ever trust anyone, be sure it is yourself - not a big corporation. YMMV