What to do if your pension is cut - New York News

What to do if your pension is cut

Posted: Updated:
(WJBK) -

As Detroit continues its Chapter 9 bankruptcy process, retired City of Detroit pensioners are still learning about the fate of their monthly pension payments. GreenPath Debt Solutions, a nationwide, non-profit credit counseling and education organization, with offices across the United States, reminds retired city employees with pensions, and all retirees, that they need to have a plan in place, in case their monthly income is reduced.

"Many of the City of Detroit retirees rely on their pensions as a steady monthly income," said Jane McNamara, GreenPath president and CEO. "While there is still much to be determined as to the security of their pensions, it is imperative that retirees start to look at their monthly budget now and talk about possible scenarios in the future."

McNamara emphasized that anyone who is in a difficult financial situation, not just Detroit pension holders, will benefit from looking at their income and expenses.  Some steps to consider:

Set Up a Budget - Many people think if they have money in their account at the end of the month, they are doing okay. "While this may work in some cases, individuals who may see a drastic cut in their monthly income will need to prepare ahead to make sure their expenses are covered," McNamara said. 

A simple way to build a budget is list all income (pension, part-time work, etc.). Then, list all your major expenses (mortgage, car payment, insurance premiums and utilities, etc.) and subtract from your net income. From there, track other expenses, like groceries, gasoline and credit cards.

Maintain Your Budget – "Years ago, we taught our clients to allot cash each month in an envelope system, where you would put cash in an envelope for a certain expense," said McNamara. "Nowadays, we teach the envelope system as a budgeting concept with the basic premise that you only spend what has been allotted, and once it's gone, you stop spending." Try to maintain each monthly allotment without borrowing from other "envelopes."

Track your Expenses - Tracking expenses is a key aspect of maintaining the budget that you have created. If you do not track your expenses, there is no way of knowing whether you are staying within the budget you have established. "The most basic tracking method involves writing down all of your expenses in a notebook every day," said McNamara. "Another tracking technique involves saving receipts for purchases and documenting that information in a notebook or on your computer."

Have the Talk – Communication is key when it comes to personal finance. McNamara said that individuals should sit down today with their spouse and family and have an honest discussion about money. "People have misconceptions about how they should use money in a household," she said. "Some view money as something they should spend freely each month, while someone else looks at money as something that needs to be saved." Retirees need to talk now about what steps they will take today, in case their income is drastically reduced in the future.

Common Mistakes to Avoid – McNamara reminds people that, while credit cards are convenient, you must pay them off in full each month in order to avoid heavy interest fees that will cause your budget to falter. "Remember, when you use a credit card, you are borrowing to make that purchase and borrowing comes at a cost," she said.  Other mistakes include not tracking your expenses, borrowing from one category to fund another and putting yourself in tempting situations, like splurging on a vacation to get away from it all, when you don't have the funds to finance the trip.

Ask for Help – GreenPath Debt Solutions offers free debt counseling and coaching sessions, in-person, over the phone or Internet, with no obligation. "We work with thousands of people each year in helping them build a budget and a work plan to prepare for the future," said McNamara. "We provide impartial advice from an experienced, degreed professional credit counselor."

A GreenPath counselor will thoroughly assess household income and expenses, find places to save, and develop a customized budget and action plan for achieving personal finance goals. "We encourage any Detroit pension holder or retiree across the United States, who has questions around budgeting and expenses, to reach out to us today for free help," she said. 

For more information, or to schedule an in-person counseling session at GreenPath's Detroit, Michigan office or at one of 55 offices in 12 states, call (800) 747-2898 or log on to www.greenpath.org.

Keep up with GreenPath Debt Solutions on social media at www.facebook.com/greenpathdebt and www.twitter.com/greenpathdebt. Visit GreenPath's blog at http://greenpathdebt.wordpress.com/.

 

 

  • Local NewsLocal NewsMore>>

  • LL Cool J stays true to hip hop roots

    LL Cool J stays true to hip hop roots

    Friday, August 1 2014 10:38 PM EDT2014-08-02 02:38:22 GMT
    EXCLUSIVE -- LL Cool J grew and evolved from a hip hop artist out of Hollis, Queens, to a Hollywood TV and movie star. But he always stayed true to hip hop culture. We'd see him backstage at concerts just hanging out with us, so when I heard he was back in New York for the summer I had to find out why. I tracked him down to a Midtown Manhattan recording studio for this exclusive interview.
    EXCLUSIVE -- LL Cool J grew and evolved from a hip hop artist out of Hollis, Queens, to a Hollywood TV and movie star. But he always stayed true to hip hop culture. We'd see him backstage at concerts just hanging out with us, so when I heard he was back in New York for the summer I had to find out why. I tracked him down to a Midtown Manhattan recording studio for this exclusive interview.
  • Friday Night Live: August 1, 2014

    Friday Night Live: August 1, 2014

    Friday, August 1 2014 10:28 PM EDT2014-08-02 02:28:04 GMT
    This is Fox 5's Friday Night Live, a weekly celebration of the end of the work week. All summer long, the Fox 5 team brings you the latest in entertainment, nightlife, food, and music in our area. In this jam-packed episode: an exclusive interview with superstar LL Cool J, a helicopter tour over New York City, dishing on celebrity relationships, and sexier breakfast with Chef Mark Bailey.
    This is Fox 5's Friday Night Live, a weekly celebration of the end of the work week. All summer long, the Fox 5 team brings you the latest in entertainment, nightlife, food, and music in our area. In this jam-packed episode: an exclusive interview with superstar LL Cool J, a helicopter tour over New York City, dishing on celebrity relationships, and sexier breakfast with Chef Mark Bailey.
  • Central Park underwear run

    Central Park underwear run

    Friday, August 1 2014 10:16 PM EDT2014-08-02 02:16:48 GMT
    Raw athleticism streaked through Central Park Friday evening bared for a modest body of spectators. Two-hundred triathletes ran a skimpy 1.7-mile loop in their underwear to flesh out the opening festivities of New York City Triathlon weekend.Midriffs and tan lines rippled in the open air and a not-so-tighty finish saw the first male and the first female finishers undress the course in record time.
    Raw athleticism streaked through Central Park Friday evening bared for a modest body of spectators. Two-hundred triathletes ran a skimpy 1.7-mile loop in their underwear to flesh out the opening festivities of New York City Triathlon weekend.Midriffs and tan lines rippled in the open air and a not-so-tighty finish saw the first male and the first female finishers undress the course in record time.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices