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About PBGC

PBGC Blog: Retirement Matters

A commonly asked question is how does PBGC determine how much a retiree receives? There's no simple explanation. The short answer is it's sort of complicated.  The longer, more detailed answer is that the amount a retiree receives is dependent on a multitude of factors specified by law, one of which is the maximum guarantee limit, which is adjusted yearly.

Common Misconception: The guarantee limit is often misunderstood to be the maximum benefit PBGC can pay retirees. However, that is not the case.

In many cases retirees receive benefits from PBGC in excess of the maximum guarantee. Whether a retiree receives more than the guarantee depends on a number of factors, including:

1. What the retiree's earned benefit was before the plan terminated

2. How long they've been retired when PBGC takes over

3. The plan's funded status at termination

4. Whether any other limitations apply

FACT: According to a 2006 study, about 85% of retirees who get their pension from PBGC receive their entire earned benefit.

FACT: The guarantee is lower for those who retire early or when there is a benefit for a survivor.

FACT: The guarantee is increased for those who retire after age 65.

Find out more about the 2013 maximum insurance benefit.

Ominous clouds

Today's reality is that Americans are deeply concerned about the future of their retirement. According to a recent Pew Research survey, 4-in-10 American adults aren't as confident about their finances for retirement as they were in 2009.

The survey highlighted 35 to 44-year-olds as the age group most concerned about their retirement.

Why the concern? An NBCNEWS.COM article said Americans started to feel pessimistic about their retirement futures beginning in 2009 following the nation’s economic collapse. The gloomy outlook worsened this year.

So, the question is — are you worried about retirement?

Read the full NBCNEWS.COM article and the Pew Research survey.

There are a number of websites and online tools to help with retirement planning.  In particular, retirement calculators are one of the most useful tools in helping future retirees figure out how much to save for retirement. Although this tool, in its many variations, can be extremely helpful, very few actually provide detailed instructions on how best to use them. Fortunately, CBSNEWS.COM features Steve Vernon's tips on using retirement calculators:

  • Tip #1: What rate of return do you expect on your retirement savings?
  • Tip #2: When do you expect to retire?
  • Tip #3: How long will you live?
  • Tip #4: How much retirement income do you need?
  • Tip #5: Should you include Social Security benefits?

Read the CBSNEWS.COM full article:http://www.cbsnews.com/8301-505146_162-57494187/5-tips-for-using-retirement-calculators/.

A secure retirement is every worker's dream, but successful retirement planning is what makes that dream a reality.  

There are many tools and resources to help make the process a lot simpler and less daunting.

For instance, the U.S. Department of Labor, Employee Benefits Security Administration (EBSA) has a great online publication complete with interactive worksheets to help you with the process of retirement planning.

Taking the Mystery Out of Retirement Planning is available online and can also be requested in print.

We hope this resource is helpful!

Backyard with patio overlooking a lake.

As many retirees rely on a fixed income, the decision of where to retire can sometimes be tough. The golden ticket is finding a place that is not just affordable but enjoyable. Many retirees want a place that is alive with arts, culture, and community.

Luckily, AARP has done the research so you can get the most bang for your buck! Their listing of the “10 Best Places to Live on $100 a Day”:

 

  • Spokane, Washington
  • Las Cruces, New Mexico
  • Eau Claire, Wisconsin
  • Roanoke, Virginia
  • Morgantown, West Virginia
  • Pittsburgh, Pennsylvania
  • San Antonio, Texas
  • Omaha, Nebraska
  • Grand Junction, Colorado
  • Gainesville, Florida

 

Read AARP’s full article: http://www.aarp.org/home-family/livable-communities/info-07-2012/best-places-for-low-cost-retirement.html?intcmp=HPBB2C

According to a recent Prudential study, women are less confident about their retirement finances than their male counterparts. The study also highlighted the difference in level of confidence between women younger than 35 and those of the baby-boomer generation. It is believed that this confidence gap may reflect a gap of knowledge and experience.

An article from CBS Money Watch details the following tips women can take to boost their confidence about being prepared for the future.

1.       Go for retirement benefits

2.       Contribute to spousal IRA

3.       Inventory your retirement benefits

4.       Monitor and manage investments

Read the full article on CBSNews.com.