An interesting article –
Steve
=============================
Ford Motor Company’s (F) ads urge you to “swap your ride,” but the auto giant also has a swap in mind for 90,000 former employees: a voluntary buyout of their pensions. Ford is offering lump sum payouts to salaried retirees and former workers–a move aimed at cutting pension liabilities and balance sheet volatility.
The huge buyout offer is just the latest sign that defined-benefit pensions are receding as a retirement solution in the private sector. Although DB plans are still pervasive in public-sector workplaces, just 35% of Fortune 1000 companies still sponsor actively accruing plans, according to Towers Watson.
DB pensions and Social Security are the most important sources of guaranteed lifetime income. Both offer critical protection from longevity risk–the chance that you’ll outlive your resources in retirement. Last month’s column looked at ways to get the most from a pension if you’re lucky enough to have one; this month, let’s consider options for those who don’t. How can you create pensionlike guaranteed income on your own? And what new policies and financial tools are on the horizon that might lead to more low-risk retirement-income options?