NEW YORK (CNN/Money) -
Traditionally, pensions have been the gold standard of retirement plans. Let's face it, if you have the option of funding your own retirement or having someone else do it for you, you'd take the free ride, right?
Unfortunately, these days that free ride isn't what it used to be. Not long ago, UAL, the owner of United Airlines, announced it would stop contributing to its under-funded pension plans. Now, workers at US Airways are worried the same might happen to them.
Worried whether your retirement dollars will be there when you need them? Here are today's 5 Tips.
1. Understand the safety net.
If your company can't pay your benefits, the federal government runs an insurance program for pensions called the Pension Benefit Guaranty Corp. When companies go into bankruptcy, this outfit steps in and pays worker pensions. In 2003, 155 distressed plans were taken over by PBGC.
Bankrolled by employer-paid insurance premiums, the PBGC currently pays benefits to more than one million Americans. It insures 44 million people participating in 31,000 private-sector pensions. Maximum benefits allowed by the government are $3,699 a month or $44,386 a year for workers whose plans ended in 2004 and who retire at age 65.
That's the good news. The bad news is that the PBGC doesn't always fully fund benefits, particularly for highly paid workers. So if your company goes into bankruptcy and the PBGC steps in, you may not get all the benefits you've been promised.
Also, the PBGC has come under scrutiny lately, as concerns about its long-term viability persist. While the PBGC has enough money to keep operating in the near-term, Labor Secretary Elaine Chao says reforms are needed to strengthen the entity's long-term financial stability.
2. Take matters into your own hands.
Given the state of the PBGC, if you're concerned about getting a pension, it makes sense to save as much as you can on your own.
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 CNNfn's Gerri Willis shares five tips on getting financially fit for your retirement.
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That's where the Roth IRA comes in. If you're single and making less than $95,000 or if you're married and making $160,000 or less you can contribute $3,000 a year (or $3,500 a year if you're over 50) to a Roth IRA.
You can't take a tax deduction, when you contribute, but when you take the money out you won't pay any taxes on it. You can withdraw the money tax-free once you reach the age of 59.5 (and have held your Roth IRA for 5 years from your first contribution).
3. Don't take chances.
If you're trying to bolster your retirement savings, now is not the time to gamble.
If you're playing catch up, observe the basic rules of investing: Greater returns will mean taking on greater risk. Making rash investment decisions in a panic will put any savings in danger.
And don't chase the market if you're nearing retirement age and worried whether your savings will sustain you. The last thing you want to do is buy yesterday's winners.
4. Delay, delay, delay.
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| | Year of birth | | Yearly increase rate | | 1929 - 1930 | 4.5% | | 1931 - 1932 | 5% | | 1933 - 1934 | 5.5% | | 1935 - 1936 | 6% | | 1937 - 1938 | 6.5% | | 1939 - 1940 | 7% | | 1941 - 1942 | 7.5% | | 1943 or later | 8% |
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Americans are already working longer. By staying on the job, they not only make more money to sock away, but they pay into social security longer.
If you pay in longer and take nothing out, you'll be rewarded later on. Your benefits will be increased by a certain percentage for each month you don't receive benefits between retirement age and age 70. This table shows the rate your benefits increase per year if you delay retiring.
5. Opt for the 401(k).
It's far more common for companies to switch their retirement plan to a 401(k) than it is to discontinue a pension in the event of bankruptcy.
If that's the case, you'll definitely want to start participating as soon as you can. That way, you can take advantage of as much pre-tax savings and company matching as possible.
This year, you can save up to $13,000 pre-tax if you're under age 50. If you're over 50, you can save an additional $3,000 a year.
For more retirement advice and information, check out the Retirement section of CNN/Money.com.
Gerri Willis is a personal finance editor for CNN Business News. Willis also hosts CNNfn's Open House, weekdays from Noon to 12:30 p.m. (ET). E-mail comments to 5tips@cnn.com.
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