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Section 5
A Cut in Retirement Or
Medical Benefits
As discussed in Chapter One, traditional pensions and
comprehensive health coverage paid for by employers are
quickly becoming a thing of the past. Many, if not most,
companies no longer consider retiree benefits and income to be
their responsibility. With the extremely high numbers of failed
or underfunded pensions that have come about since 2000, it’s
not a stretch to say that future retirees must start planning for
their post-employment years well before age 65 because, for
most, the predetermined pension safety net won’t be there.
A telling trend that highlights this shift is companies freezing
pension plans for new or certain current employees. A popular
approach to pension freezes is to deny pension coverage to
new hires as well as cut off pension contributions for workers
designated in a particular age group. The trend toward
freezing pension plans is accelerating as corporations try to
cut obligations to retired employees. Even pensions that have
survived may be at risk. With the dramatic decline in the number
Chapter 5: Things That Can Wreck Your Retirement
