federal reserve

6 ways Federal Reserve policy hurts retirees

Retirement » 6 Ways Federal Reserve Policy Hurts Retirees

Fed policy effect No. 3: Underfunded pension funds
Fed policy effect No. 3: Underfunded pension funds © Africa Studio/Shutterstock.com

Today's pension funds are in big trouble. Ninety-four percent of corporate defined benefit pensions were underfunded in 2012, according to a recent report by Wilshire Consulting.

Pension funds must make sure their assets grow at a pace adequate to cover future liabilities. The Wilshire report notes that today's low interest rates make this especially difficult to achieve.

"It is putting pressure on the already-weak pension system," Scott says.

But Rubin notes that pension woes are unlikely to affect large numbers of retirees.

"Most retirees don't have pensions and will not be affected," he says.

He also believes that current pension recipients are unlikely to see their payout cut. But future retirees may not be as lucky, he says.

Moore agrees. "It is hard to know if clients can depend on them for their retirement income," he says. Workers who are worried about their company's pension plan must take action now. "They need to save more or work longer, as well as delay Social Security, to maximize the benefit they will receive."

advertisement

Show Bankrate's community sharing policy
          Connect with us
MORTGAGE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed, 0 point 4.27%  0.05 4.22%
15 year fixed, 0 point 3.27% --0.00 3.27%
5/1 ARM 3.35%  0.13 3.48%
 
View Rates in your area Next
Product Rate Change Last week
30K FICO-based HELOC 4.38%  0.08 4.46%
50K FICO-based HELOC 4.11%  0.06 4.17%
100K FICO-based HELOC 3.96%  0.03 3.93%
 
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.73% --0.00 2.73%
48 month used car loan 2.97%  0.04 2.93%
60 month new car loan 3.22%  0.05 3.17%
 
View Rates in your area Next
Product Rate Change Last week
1 Year CD 0.90%  0.02 0.92%
2 Year CD 1.09% --0.01 1.08%
5 Year CD 1.74% --0.00 1.74%
 
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.67%  0.02 15.65%
Cash Back Cards 16.36%  0.03 16.33%
Low Interest Cards 10.87% --0.00 10.87%
 
Next
advertisement

Blog

Polyana da Costa

Borrowers get $2.5B from Citi

About $2.5 billion of Citi's $7 billion settlement will go to consumers  ... Read more

advertisement
Partner Center
advertisement

Connect with us