government pension adviceThe government pension advice you see online these days is pretty appalling. People ask questions like: How much can I reduce my retirement savings since we’ll have a pension to lean on?

And financial advisors will help you estimate the numbers.

But that’s not the kind of government pension advice I want to give. It’s not something many pensioners want to hear, but you shouldn’t expect anything from your government pension, unless you’re retiring in the next year or so. Here’s three reasons why.

Pension Liabilities are Underfunded

People today seem to trust their pensions more than they trust themselves. They think: I might not be able to save enough money for retirement, but at least I’ll have my pension to fall back on.

And they don’t know how wrong they are.

Just like everything else the government runs, pension programs are vastly underfunded. Think tank Budget Solutions says public pension plans have promised to pay $4.7 trillion more money than they have. In this scenario, every citizen of the US would have to contribute $15,000 to make it happen.

Pensioners are still receiving their checks for now, but what about the long term? There’s no way they’ll be able to keep that up.

Ultimately, the Government Holds the Cards

The states are in varying degrees of turmoil when it comes to funding pensions. According to the Commonwealth Foundation, Pennsylvania alone has $50 billion in unfunded pension liabilities.

But none of them have the money they need to deliver what was promised to pensioners. So what are they going to do? They certainly can’t borrow from foreign powers like the federal government does. So they’ll do the next best thing:

Just not pay you.

Don’t get me wrong, I understand that unions are powerful bodies and there are laws in place to protect you from this. But it’s looking like there won’t always be.

Back in 2014 New Jersey Gov. Chris Christie cut state pensions as part of a bill to address budget problems. The unions took him to court, and guess what happened? The New Jersey Supreme Court ruled that pension cuts were legal.

So ultimately, the government holds all the cards. Whatever legal protections are in place today can be changed. So you can’t really rely on anything. That’s my government pension advice.

There’s Still Time to Lose Your Job Anyway

So governments just don’t have the money. But that’s not the only way you can end up without a pension. Even if you’re approaching retirement, there’s still plenty of time to lose your job. Then you won’t even qualify for a portion of what you expected to receive.

Maybe you feel very secure in your job, and can’t imagine getting fired. There’s always the layoff. Automation is taking over all sorts of sectors, and the government is just as interested in saving money on workers as private corporations. Government positions get taken over by robots all the time. So no one’s safe.

What Next?

If you want to be smart about your retirement savings, don’t plan to lean on your pension at all.

Bridgewater Associates estimates that 85% of US public pensions will fail over the next three decades. And if you do manage to get something from yours, just think of it as a bonus.

Here’s some better government pension advice: start looking for other ways to fill your retirement savings gap so you can make it on your own. That’s what this blog is all about — helping people find unique ways to fund their retirement, even if it’s already on the horizon.

Do need you need help? Join our list and our community and we’ll educate you on all the options available to salvage your retirement.

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