For decades, millions of Americans trusted that a company or government pension would take care of them in retirement.
But the world has changed:

• Pensions are becoming rare — and less secure.
• Some pension plans are underfunded or even collapsing.
• Even government pensions aren’t guaranteed forever.

If you’re counting on a pension, you need a backup plan.

In this section, you’ll meet real people facing pension uncertainty — and learn how to protect your future, even if your pension doesn’t deliver as promised.

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1. Only 15% of private sector workers have a traditional pension today.

• Example:
  Most Americans entering the workforce now will never see a traditional pension.
• Case Study:
  Leroy Jackson, 57, Charlotte, North Carolina
  Leroy, a married father of three and weekend jazz musician, spent 25 years at a manufacturing plant that phased out pensions five years before he planned to retire.
  Action: Leroy pivoted quickly, opening an IRA and maxing out contributions while increasing his 401(k) savings to make up for the lost pension.
• Solution:
  Don’t rely on a pension that may disappear.
  Build your own retirement savings through 401(k)s, IRAs, and taxable brokerage accounts.

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2. Many pension plans are underfunded — some by over 40%.

• Example:
  Even if you were promised a pension, the plan itself might not have enough money to pay you.
• Case Study:
  Susan Miller, 62, Springfield, Illinois
  Susan, a retired public school administrator and grandmother of four, was shocked when her state announced funding shortfalls that could impact future pension payouts.
  Action: She reduced expenses, moved into a smaller condo, and boosted her emergency savings to buffer against possible pension cuts.
• Solution:
  Have a Plan B.
  Keep at least 6–12 months of living expenses saved outside of your pension reliance.

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3. PBGC (Pension Benefit Guaranty Corporation) only insures certain private pensions — and has limits.

• Example:
  If your company goes bankrupt, you might not receive your full promised benefit.
• Case Study:
  Alan Wong, 64, Cleveland, Ohio
  Alan, a retired airline mechanic and avid fisherman, learned that PBGC would only partially cover his pension after his employer declared bankruptcy.
  Action: Alan supplemented his reduced pension with part-time work at a local hardware store and drew down smaller amounts from his IRA to stay financially stable.
• Solution:
  Research how much protection your pension really has.
  Know PBGC limits and prepare for a reduced benefit possibility.

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4. Public pension funds are facing a $1.3 trillion shortfall.

• Example:
  Many government pensions are deeply underfunded, especially at the city and state level.
• Case Study:
  Patricia James, 66, Hartford, Connecticut
  Patricia, a retired municipal worker who loves quilting and gardening, worried when local news outlets reported massive underfunding in her city’s pension system.
  Action: She cut back on discretionary spending, built a side income teaching online sewing classes, and reviewed her investment strategy to create more reliable cash flow.
• Solution:
  Diversify beyond your pension.
  Don’t rely solely on a government pension — build additional retirement income streams.

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5. Multi-employer pension plans are some of the most at-risk.

• Example:
  Pensions that cover workers from multiple companies are especially vulnerable to funding problems.
• Case Study:
  David Gomez, 61, Milwaukee, Wisconsin
  David, a retired truck driver and baseball fanatic, participated in a multi-employer pension plan that announced cuts after several companies left the program.
  Action: He immediately met with a financial planner, adjusted his spending, and built a “second income” through part-time courier work.
• Solution:
  Monitor your pension plan’s funding status.
  Get updates from your plan administrators — and have a savings buffer ready.

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6. Pension freeze plans are becoming more common.

• Example:
  Many companies are freezing pension benefits at current levels — meaning no future growth.
• Case Study:
  Linda Nguyen, 54, Sacramento, California
  Linda, a human resources manager who loves weekend wine tastings, learned her employer was freezing all pension growth at current levels.
  Action: She boosted her 401(k) contributions to 20% of her salary and opened a Roth IRA to ensure future growth beyond her frozen pension.
• Solution:
  Shift savings aggressively into 401(k)s and IRAs.
  Assume frozen pensions will not grow with inflation or future years of service.

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7. Cost of living adjustments (COLAs) are disappearing from many pensions.

• Example:
  Without COLAs, a pension that feels big today could shrink dramatically due to inflation.
• Case Study:
  Frank Simmons, 69, Atlanta, Georgia
  Frank, a retired police officer and backyard BBQ champion, found that his pension hadn’t kept pace with rising living costs after COLAs were suspended.
  Action: Frank moved to a lower-cost-of-living state and reduced monthly expenses to stretch his fixed income.
• Solution:
  Assume no COLA and plan accordingly.
  Inflation-proof your budget by lowering fixed expenses early.

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8. Many pensions penalize you if you leave before a certain age or service year.

• Example:
  Quitting or getting laid off before “vesting” can mean losing some or all of your pension benefits.
• Case Study:
  Tina Brooks, 45, Raleigh, North Carolina
  Tina, a healthcare IT specialist and dog rescue volunteer, almost left her job two months shy of full pension vesting.
  Action: After learning the rules, she stayed another year, ensuring she kept her full vested pension benefit before moving to a new employer.
• Solution:
  Understand vesting rules.
  Don’t leave money on the table — know exactly when you qualify for full pension rights.

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9. Pension benefits may be reduced if the plan faces financial trouble.

• Example:
  Even promised benefits aren’t guaranteed if the plan’s funding collapses.
• Case Study:
  George Watson, 70, Pittsburgh, Pennsylvania
  George, a retired steelworker and classic car buff, saw his pension reduced after his union’s pension plan ran out of reserves.
  Action: He picked up weekend shifts at a car restoration shop to supplement his reduced pension and adjusted his lifestyle to stay financially independent.
• Solution:
  Create flexibility.
  Prepare to supplement pension income with side work, freelancing, or small businesses.

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10. Government bailouts (like the American Rescue Plan) may not fully fix pension issues.

• Example:
  Even with government help, many pension systems are still fragile.
• Case Study:
  Joanna Lee, 60, St. Paul, Minnesota
  Joanna, a retired bus driver and stained glass artist, was relieved when the American Rescue Plan helped stabilize her pension — but she didn’t trust that to last forever.
  Action: She continued part-time work, boosted her emergency savings, and invested conservatively to create a personal backup fund.
• Solution:
  Don’t count on bailouts.
  Treat any government pension assistance as a bonus — not a guarantee.

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Key Takeaways from Part 5:

• Pensions are riskier today than ever before.
• Your retirement plan must stand even if your pension shrinks or disappears.
• Self-funded savings create true financial independence.

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Call to Action:

Are you relying too much on a pension that could change?
Let’s build a strong, independent retirement plan — one you control, not your old employer.
[Schedule your free pension-proof retirement review today!]

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