Pensions

In many parts of the USA, there are coveted financial instruments called pensions. Most people think of them in the realm of the armed services, or government work. However, they can encounter other different realms like education, or possibly a family trust structure. Whatever a pension might be, what it really is, is an instrument that pays a nominal amount of income, with a nominal growth rate, while the organization that has issued the pension, is essentially making money on the con. The organization is using either someone called an actuary, or a team of actuaries, or just an actuarial system, or some other mathematical equation, to guarantee that the money they are giving you is benefiting you much less than the organization.

The people who usually get involved in these pensions are people who feel they are not able to produce in other parts of the more competitive marketplace. They feel that working for a pension system is a good idea since they cannot compete.  When they are old and maybe on their deathbed, at least they will have clean water and a loaf of bread. Well, unfortunately that is not true in the slightest.

It has been proven, and can be turned up with easy research, that many organizations just cut pension benefits in half, or wipe them out completely! Oh, you thought working for us was a fantastic idea because at the end of your life or maybe in the last twenty years you might get a pension that may even keep pace with the growth of the competitive marketplace? No. Sorry. You were completely and totally incorrect. Let me show you a very stark example so you will appreciate quote how bad this can be and how it can devastate even the most important people in the USA, let alone people stuck in pension systems around the world.

There was once a black person who joined the army as a youth. I use that adjective because the entire world came from Africa, so any current colloquial term that may make his skin color or shade seem different or better or worse…simply is not the best way to describe him. He came from the inner city but tried hard in school and excelled in sports. However, when he went looking for college scholarships or possibly other groups that might help him improve his overall earning power, instead of just being a high school graduate, he joined the American military, the finest fighting force in the world. He was sure that if he signed up for a twenty-year tour, he would be provided a pension that would assure him a comfortable senior living arrangement. Plus, he was not so against the idea of travelling a little, maybe getting in a skirmish or two if need be. That was just the kind of gentleman he was. Well, here is what happened to him.

He had a very docile trip through the military. He never went overseas because during his serving time there was no big war going on anywhere in the world that the US was drawn into. Even if there had been, his post during most of his time was at a training base right here stateside, where he spent a good bit of time as a drill sergeant, and then finished his time with the military as a lieutenant. He was proud of his achievement. The twenty years were over. Somehow, he had never gotten married, although like most men he had a romance or two, or three, or four. But he knew he had his pension. He was now somewhere in his late forties, and he knew he had his pension. So, he started a second career. Now the second career is not of particular meaning in this story, but what the US military did regarding his pension from his first career is.

He received a letter about five years into his second career, that the military had decided to redistribute money in its budget. It had decided that, due to a white house administration change, the military branch he had been a part of, needed some of that pension money to go toward more important things. Why? Well, now a big important war had broken out! They needed HALF of his monthly pension check to go toward buying guns and tanks and missiles for this new and intensely important war, that if not fought, would destroy the planet itself.

The gentleman in question, who had promised that twenty years of his life to the military 25 years ago, at a young age, expecting those numbers to be exactly what they were promised to be, was devastated. He no longer could afford a house. He no longer could afford a reliable car. His life was completely different, and always would be. Why? The military had no reason to give that pension money back. Most often in this world, once the money has been pulled out of your hands, either through your own mistakes or just through the strong arming or theft of another person or entity, do you ever get it back?

Unfortunately, that US veteran had learned the hard way that pensions are a sucker’s bet. If you expect them to be what they are supposed to be thirty years later, and they are always designed that way, do not expect that promise to be set in cement.