Monday, October 27, 2008

Don't expect your pension fund to survive.

You can pretty much kiss that money goodbye - not just public funds but private companies as well. They're all invested in the same stocks and bonds, you know. There is very little differences in the accounts of "institutional investors," whether they be pensions for government or private business clients.

US public pension funds face big losses
By Deborah Brewster in New York
Sunday Oct 26 2008 17:35

Public pension funds in US states are facing their worst year of losses in history, exacerbating existing funding shortfalls and putting pressure on state governments to shore them up.

In the nine months to the end of September, the average state pension fund lost 14.8 per cent, according to Northern Trust, a fund company. The loss has grown since, as financial markets slumped further in October. The previous highest loss for state funds was 7.9 per cent for the full year in 2002.

California's Calpers, the US's biggest pension fund, last week reported a loss of 20 per cent of its assets, or more than $40bn, between July 1 and October 20 this year...

What this means for you is that your elderly parents - if they are relying on a pension in addition to or (Hashem forbid) in place of Social Security - are going to be your responsibility, you and your siblings. You are going to have to be responsible for their declining years, and most likely that means they will have to live with you and be cared for by the female members of your household and your sibling's households when they are very old or ill. We can no longer afford to pawn off the care of our elderly onto strangers for money. The quality of care in homes covered by medicaid are not anything you would want an animal to live in, much less your relatives.

And that most especially includes homes run by Chereidi or Ultra-orthodox Jews, to be frank. A secular company may at least have some fear of the regulators and laws pertaining to elder care. The Rabbis have shown in uncountable ways that they have no such respect for such regulations or laws.

Investing is gambling - and people put money into investments that they could not afford to lose, and now it's going, going, gone. We have to face reality and plan what we are going to do when our parents - and ourselves! - are left with little or nothing for "retirement." Now is the time to discuss this with your siblings and your immediate family - don't let anyone say "that can't happen." Say, "I hope it can't, too, but if it does, we need a plan in place. If we never need it - great! And if we do need it, we will have come to an agreement in advance who is going to take care of what, when." Anyone who still refuses to participate is probably not someone you were going to be able to rely on to hold up their end of the agreement, anyway, so plan accordingly. Someone has to be the responsible adult in your family, and it just may have to be you alone.

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