Pension risk?

[Bimmerbill]

I've been reading the pension risk/bailout thread in the FIRE and Money forum. Most seem to think that some sort of changes will be necessary so the system doesn't collapse.

I invest pretty aggressivly, considering my pension to be the equivilent of "bonds." So, most of my 401K is in stock index funds.

I am wondering if anyone else has a similar strategy, and if you are considering altering that to reflect the belief that pensions will be reduced or modified in some way.

I have roughly 18 years until I collect my military reserve component pension ($600-$700 per month at age 60) and anywhere from 14-18 years until I can retire under the gov't FERS system.

A lot of things can change in 18 years. Has anyone come up with a way to weigh "pension risk."

 

[ziggy29]

First of all, the "pension crisis" we're hearing about is mostly at the state and local levels, not with the federal pensions. I wouldn't worry much about a federal pension plan defaulting. Yes, they could change the rules a bit, but my guess is that it would only apply to new hires who were processed in after the rules were changed. That's a fairly common "grandfather clause" especially with public employee pensions. And the federal reforms made with FERS seem like a much more reasonable and sustainable plan than either CSRS was or many state/local plans are.

The $64,000 question is how to handle the huge shortfalls in some badly hurting state and local public pension funds, as we've kicked around in that other thread.

 

[Bimmerbill]

I'm not so sure. I do think there will be changes. Didn't they change SS? Sure, some were grandfathered in, but I don't think I was.

 

[Darryl]

The last thing I would be worried about in a retirement plan is a federal pension.

Smaller group, state local okay something could possibly go wrong, but if the feds can't pay up no other plan would have worked. Canned goods and ammo.