Relying on a Pension to Retire? Food Stamps Might Be in Your Future

Will you need to get a job at McDonald’s when you retire?

If your retirement depends on a pension, you might not have a choice.

In September, we called the U.S. public pension system a “slow-moving train wreck.” Public pension funds manage retirement money for government workers like teachers and police officers. Part of your tax dollars likely go into public pensions.

These funds have promised to pay a steady income stream to millions of Americans when they retire. However, many will break this promise...

In short, public pension funds are going broke. Certain state pensions are laughably short the money needed to pay retirees. For example, Illinois only has enough money to cover 22% of its promised payments. Connecticut can only cover 23%...Kentucky can only cover 24%.

According to think tank Budget Solutions, public pension plans have promised to pay out $4.7 trillion more than they have on hand. Every U.S. citizen would have to pitch in $15,000 to pay everyone’s promised pension.

BlackRock (BLK), the world’s largest money manager, expects 85% of U.S. public pensions to fail over the next three decades.

• Private pensions also face a crisis…

A private pension fund manages retirement money for a group of non-government workers. Workers pay into the pensions over their careers. When they retire, the fund sends them a monthly check drawn from the common pool of money.

According to the Pension Rights Center, 52 multi-employer plans have told the federal government they are in “critical and declining” status, meaning they might have to cut benefits to survive. Seven of these funds warn they may go broke within the next eight years.

Private pension funds are failing for the same reasons as public pensions: they’re not taking in enough money, and they promised retirees too much.

• A major private pension just made a drastic cut…

The Central States Pension Fund is a giant private pension fund. It manages almost $18 billion for 400,000 workers in 37 states.

The fund recently decided to cut benefit payments by as much as 61%. Retirees currently getting monthly checks for $3,000 will only get $1,180 now.

Last week, The Kansas City Star reported:

Central States has told its retirees that the cuts are needed because without them the fund will run out of money in 2026 and be unable to pay any benefits.

“We simply can’t stay afloat if we continue to pay out $3.46 in pension benefits for every $1 paid in from contributing employers,” said letters the fund sent to retirees facing the cuts.

• The cuts will affect hundreds of thousands of people…

One retiree said the cuts are “going to cripple [his] family.” Other pensioners are asking themselves difficult questions, The Kansas City Star reported.

“You know anybody hiring a 73-year-old mechanic?” Rod Heelan asked... “I’m available.”

Tom Lemmons of Sweet Springs, Mo., and Gary Meyer of Concordia, Mo., grew up together and have spent recent months talking about how they’d get by if the pension cuts go through.

“I’ll have to go find a job. I don’t know. I’m 68,” Meyer said. “It would probably be a minimum-wage job.”

“I guess food stamps. Hopefully not. It would be a last resort,” he said.