The Pension You Never Owned

My grandfather died about a month ago, and I recently learned that in his will he distributed his money unevenly between his children and grandchildren. I received significantly more than other members of the family, but I make $140,000 a year. I’d like to give them some of my inheritance to even things out. How would you approach this?

You’re obviously unselfish and have a really good heart. But honestly, it was your grandfather’s decision and his money to do with as he pleased. It wouldn’t be wrong or greedy to simply keep what you have without worrying about it a second longer.

If some of your relatives are having financial troubles and you feel that making a gift of a portion of your inheritance will help, you can do that. With your income, it’s probably not going to change your life in a big way. My advice would be to look at your relatives and their situations objectively and see if something like this would really be a blessing. Then, if your heart and your head still tell you it’s a good thing, do it.

Considering the condition of the economy, how secure should I feel about the solvency of my pension?

In many ways, this would depend on your particular pension. Some pension funds are very well-run, very solvent and are in great shape. Others are poorly managed and not the type of programs in which you’d want to invest any of your money.

The biggest problem with a pension is that it’s the property of the organization. If it’s a union pension, it’s not yours—it’s theirs. All they do is pay you out of the fund. So if they go broke, you lose everything you had in there. If it’s a business that has the pension, that makes them the owner—not you.

That’s the beauty of the 401(k). You’re the actual owner. If the company you work for goes broke or the union does a poor job of managing things, it doesn’t harm your investment.

Don’t misunderstand what I’m saying. There are good pensions and bad pensions, just like there are great managers and lousy managers. Just make sure you check into the solvency of the program before you put your money in there!

I think woven into your question is another question: What do I think about the predictions of our economy completely collapsing? The truth is I don’t believe for one second that our economy is going to completely collapse. Do we have some serious problems that should be addressed? Yes. Do we have politicians who are stupid and who don’t want to address these problems? Absolutely. But does that mean the world is coming to an end? Of course not!

It does mean, however, that you and I need to demand that the people in Washington stop playing games and do their jobs. This ridiculous spending spree we’ve been on for years has to stop. Government spending on all levels—national, state and local—is ridiculously out of control.

I’ve heard end-of-the-world predictions most of my life. But the truth is, we’re not going to see anything of that magnitude until Jesus comes back. No, I’m not going to predict or believe that the U.S. currency is going to collapse. Don’t spend all of your time and energy worrying about conspiracy theories and doomsday scenarios. Spend it living life!

The correct response would be to use your brains to make the best use of the money- obcviously THEY (the poor relatives) have no clue how to be successful

You help no one by giving them a handout- hire them in a business you create with the money

But the truth is, we’re not going to see anything of that magnitude until Jesus comes back.

Dear Dave,
Do *you* have the inside track on when He is coming back? Or, is the comment above an indication of your belief that He isn't ever coming back?

Either way, your assumption that our economy isn't possibly going to collapse, is exactly *that*, an assumption. Anyone's assumption as to the near term, or long term future is, as they say, not necessarily valid...

the infowarrior

Legally, corporate pensions are *not* owned by the corporation, but by the beneficaries. The corporation is obliged to keep them funded in an actuarially sound manner, which basically assumes that future claims will be funded at least 80% from fund assets, 20% from future corporate contributions, based on an assumed return on assets of about 8%. Private pensions are insured, like bank deposits. Private pension funds that are not actuarially sound must make up the difference. The problem for the Post Office and municipal pension funds it that they were never actuarially sound, and future income, i.e., taxes and sales of postage stamps, are collapsing.

4 posted on 07/23/2013 7:26:06 AM PDT by Lonesome in Massachussets (Doing the same thing and expecting different results is called software engineering.)

Inflation.

Inflation is what is going to destroy your pension.

I agree, Dave is a bit flippant about doomsday possibilities.

interesting isn’t it how certain personalities predict certain things: Glenn Beck is sure the cataclysmic collapse will happen....Ramsey is just as sure it is not going to happen. Are they pimping the notion that enriches them? Or do they really believe it, and align their interests as such (Glenn selling food and gold futures, Ramsey more main stream investment and savings advice).

Just sayin....

In the 10 commandments, with Charleton Heston, the Pharaoh is asked who will be the next Pharaoh.

“The man who can best rule Egypt” he says, “And I owe that to my fathers, not to my sons.”

7 posted on 07/23/2013 8:02:41 AM PDT by donmeaker (Blunderbuss: A short weapon, ... now superceded in civilized countries by more advanced weaponry.)

re: “Glenn Beck is sure the cataclysmic collapse will happen....Ramsey is just as sure it is not going to happen.”

In fairness to Dave, he never said that we couldn’t go through very bad economic times, possibly even worse than what we are going through now, but a total, complete collapse of the U.S. economy to zero? He thinks not.

If that were to happen, it wouldn’t just be our country in trouble - the entire world economy would also collapse. Dave thinks that is an “end of the world at the coming of Jesus” event. I hope he is right.

I think you’re giving Dave too much of a pass on this narrow point. I like Ramsey, used his system inside my family and my business to a degree. I just think he’s being too flip about this.....

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