Will you get a pension?

The CBS “Sunday Morning” show this week featured a story about how the city of Prichard, Ala., suddenly stopped paying pension checks to its retirees back in September 2009. None of the city’s retired municipal workers has received a check since then because the city says it simply does not have the money.

“You can’t draw blood from a turnip,” attorney Scott Williams, who represents the city of Prichard, told “Sunday Morning.” “All the colloquialisms you want to come up with, if the money’s not there, we can’t pay it.”

Not enough money

The retirees want to know what happened to the pensions they contributed to over the course of their careers. Many of these folks are now struggling to pay for basic living expenses and had expected the pensions to be their primary source of income. Unfortunately, this scenario could happen in other towns and cities.

Joshua Rauh, of Northwestern University’s Kellogg School of Management, told Sunday Morning, “Across the United States there is a difference of $3 trillion between the amount of money that we have promised public employees and the amount that has been set aside.”

If you are a current or former public employee who is concerned about whether or not you will receive your pension, it’s important to become as informed as possible about your situation. Find out whatever you can about your employer’s financial health. Also talk with a knowledgeable financial planner who can help you sort out your options.

Can a reverse loan help?

For some senior citizens staying at their current job or returning to the work force may be their best option to bring in more income. Other seniors may want to investigate whether or not a reverse mortgage can help them. Reverse loans are available to homeowners who are at least 62 years old. To qualify you will need to have enough home equity so that a portion of it can be borrowed against. Make an appointment with a reverse mortgage counselor to get more information about how borrowing money may or may not help you.

This entry was posted on Monday, February 21st, 2011 at 2:17 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.