[quote=bearishgurl]I’m failing to see why boomers need these high numbers in savings, stocks, etc to survive … especially ones with pensions who are just a few years from SS (assuming it pays out the retiree’s entire life).
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Simple.
1. Not every baby boomer is lucky enough like you to have a pension.
2. Not every baby boomer is lucky enough, even if they had a pension, to still have a pension that is paying what was promised (think airline industry).
3. And even if you have a pension now, I personally wouldn’t get smug about it and kid yourself in thinking it’s 100% safe in the future. You can argue all you want whether it is safe or not…but what IF you’re wrong and it’s not….If you only counted on the pension, and suddenly it stops paying or paying less, and you didn’t have another stream of income, you’re putting yourself at risk.
There is no “safe” investment anywhere…even pensions, even state/federal pensions…Just look at the latest news about the fed starting to borrow against the federal pension funds to make up for the fiscal cliff shortfall. They “promise” to pay it back….So don’t take a chance. Same goes for social security. And frankly same goes for medicare…
look at younger people like me who are going like WTF why do we need to pay for taxes to pay for this? I’m not trying to argue whether I’m right or wrong. My point is to tell you there’s enough people who don’t like it, that will push back, and when if state/federal can’t really make payment, then what?
What if there are enough generation X, Y, Z that get fed up with this, and revolt and legislation does get passed to change the rules (because nothing is fixed in stone)….Then what? Don’t count on 1 thing being there and depending on that 1 thing….Because crap does happen.
It’s not a recommendation for you to get into stocks necessarily. But it’s a recommendation to spread your risk into something else…If you’re closer to retirement, don’t go after those larger gains that take on risk. Just spread your risk out safer things (even if the return is lower). You know just in case your pension does get cut….
One of my relatives had a choice when he retired. Have a pension for the rest of his life or take a lump sum distribution and self manage.. He took the later. For the very reason of being “safe”….Because the company can go under and you get screwed, even if the pension fund is suppose to be insured or well funded. A lot of times they are underfunded. There were articles and articles about this happening before.
