Will I Lose My Tax Refund If I’m Filing Bankruptcy?

Really, only a qualified St Louis Bankruptcy attorney can tell you the answer to that question. Why? Every situation is different and there are different rules that typically apply. However, here are the general rules regarding tax refunds and your Missouri or Illinois bankruptcy.

Your refund might be used by Uncle Sam to pay and tax debt you have before you even get a chance to see it. They may even be able to take it even if you aren’t filing bankruptcy. In a Chapter 13 in Missouri, however, there is a local rule that allows debtors to keep a portion, if not all, of your tax refund. Even better, for the time being in Illinois, you can keep your refund.

Putting off getting protection from foreclosure, credit card debt help, and relief from your creditors just to save your tax refund may not be the best idea either. If you owe money for child support, student loans, or other government loans, the government can still take your refund to apply to these debts.

Even if Uncle Sam isn’t a creditor of yours, others can still get after your cash. Are your creditors levying your bank accounts? Creditors can get after that extra cash you have in the bank. Even if you don’t hire a St Louis bankruptcy attorney to take care of your debt, you may not want to have your tax refund direct deposited. If your creditors are after your checking accounts, it may be best to just get your refund the old fashioned way

How to Get Cheap Small Business Health Insurance in Illinois

More than 70% of Illinois residents get their health insurance through their employers. Here’s how to provide your employees, and yourself, with cheap small business health insurance in Illinois.

Small Business Health Insurance Plans

There are a number of plans available to small businesses in Illinois. The most common plans include:

Managed Care Plans

These are the most popular types of small business health insurance. These plans (HMOs, PPOs, and POSs) provide comprehensive health care services through a network of health care providers.

* HMOs (health maintenance organizations) pay for health care such as doctor visits, hospitals expenses, and surgical fees. You pay a monthly premium plus a small co-payment (usually $5 to $10) for each doctor visit. You must use the doctors and hospitals within the organization, and consult with a primary care physician before you can see a specialist.

* PPOs (preferred provider organizations) are similar to HMOs except that medical treatment is paid for as it is received. Instead of paying a monthly premium, you submit a claim after receiving medical services and are reimbursed for the claim minus a co-payment. You can see doctors outside the organization for an additional fee.

* POSs (point of service) plans are a combination of an HMO and a PPO. Like an HMO you pay a small co-payment for each doctor visit (usually $5 to $10). Like a PPO you may see doctors outside the health care network for an additional fee and a slightly higher co-payment.

Indemnity Plans

These plans, also called fee-for-service plans, are the traditional health insurance plans that allow you to choose your own doctors and hospitals. They pay for a percentage of your medical costs (usuallly 80%) after you pay a deductible (usually $500 to $2,000). Indemnity plans are the most expense health insurance plans.

Saving on Small Business Health Insurance

Here are five ways to save on small business health insurance:

1. Choose a managed health care plan. These are the least expensive types of health insurance, with HMOs being the cheapest.

2. Choose a high deductible. If you have healthy employees who don’t need a lot of medical care, this can save you a lot of money on your health insurance.

3. Get tax deductions. You may be able to deduct the premiums you pay on your small business health insurance. Offering health insurance coverage as part of your employee’s benefits may also reduce your payroll tax.

4. Stress preventive care. Encourage your employees to eat right and exercise. Not only will this decrease health care costs, it will also increase productivity.

5. Compare health insurance quotes. Comparing quotes for different health insurance companies can save you hundreds, even thousands of dollars on your insurance costs.

Illinois Health Insurance

The increasing costs of health care have made health insurance an absolute necessity. Health insurance is more useful for people who have bad health records, addictions like alcohol or smoking ,or who are likely to have future health problems. But everyone should have a health insurance policy to meet any kind of a health care need in the future.

There are many different kinds of Illinois health insurance plans available today, to suit all kinds of people and their requirements. There are plans from private insurance companies. Some are long-term plans, while others are short-term plans. Some plans are suitable only for children or the elderly. There are also group plans and schemes such as Mediclaim provided by employers, and group health plans for very small businesses. Then there are plans which allow tax deductions and savings. The top Illinois health insurance companies are: UniCare, Blue Cross/ Blue Shield of Illinois, Humana One, Fortis Short-Term Medical, Celtic, American Medical Security, MedPlan Access, Genesis Health System, GE Long Term Care Insurance, and Fortis Student Select Health Insurance.

The Illinois Department of Insurance provides several public plans for people who cannot be covered under private polices. The Illinois Comprehensive Health Insurance Plan (CHIP) is a state program that provides insurance to thousands of individuals who cannot be otherwise insured. The various deductible options under CHIP are: $500, $1,000, $1,500, $2,500, and $5,000. The different plans under this are Plan 2, Plan 3 and Plan 5. CHIP covers hospital services, professional medical services, second surgical opinions, outpatient prescription drugs and medicines, Orthoses or prostheses other than dental, diagnostic services, emergency services, skilled nursing facility care, home health care, hospice care and many others, depending upon the plan.

Illinois has special programs like KidCare and FamilyCare. Illinois is the first state to offer health insurance coverage for all the children in the state. The FamilyCare health insurance program covers all medical care, including doctor visits, dental care, hospital care, emergency care, specialty medical services, prescription drugs and others. The family has to meet certain limits to be eligible for this scheme. The qualifying annual income is up to 185% of the federal poverty level, or about $36,000 for a family of four. FamilyCare Assist, FamilyCare Share, FamilyCare Premium and FamilyCare rebate are the plans under this, depending upon the family income. The family can pay small monthly premiums ranging between $15 and $40, depending upon the number of family members. The state of Illinois offers a “safety net” program for individuals who have been denied health insurance. Those who are currently insured but are paying a higher premium, or those whose present insurance has a rider attached or is rated, are also eligible to apply.

There are many private Illinois insurance companies that offer attractive deals on all kinds of health insurance. You can contact an insurance agent to get the right health insurance policy. The internet is also a very good source for obtaining quotes, comparing various policies and deciding on the best one. There are many ways to apply for health insurance: online forms, downloadable forms, submission of forms through e-mail and even phone-in applications. The typical process is submission of the application along with a premium deposit or at least a non-refundable application fee; review of the application by the insurance company; and underwriting. The process takes a minimum of 2 weeks and an average of one month.

Employee Classification Act – What Illinois Contractors Should Know

In January of 2008, Illinois passed the Illinois Employee Classification Act (820 ILCS 185/1-999). In essence, the Act purports to prevent the misclassification of an employee as an independent contractor while conducting construction related activities. The law is basically an effort to prevent contractors from avoiding the payment of overtime benefits, payroll taxes, Workman’s compensation, etc.

However, many view the Act has yet another overreaching piece of legislation intended on benefiting a few while harming a great many small business owners. For instance, the new law requires that no unincorporated or unorganized sole proprietor or partnership be classified as an independent contractor unless they satisfy all twelve elements enumerated in the Act. This applies to construction, trucking, landscaping and related trades, as defined under the Act. In essence, the law provides more narrow but explicit definitions of what constitutes an independent contractor.

This places the risk directly on the contractor should any of its independent contractors actually be classified as employees under the new law. Of course, this seems burdensome to the contractor since they may now be faced with having to require that each of their unorganized subcontractors organize to avoid any potential risk.

The most significant issue under the new law appears to be filing income taxes. The sole proprietor must file his or her income taxes relating to the independent business to avoid being classified as an employee under the Act. Seemingly, contractors conducting construction and the other related activities are now directly at risk for any such failure of their subcontractors to file.

This law would also seem to certainly benefit the labor unions. Labor unions or any other interested parties, including competitors, former employees or anyone else can report a construction or construction-related company using “employees” as independent contractors. (The AFL-CIO and Teamsters strongly supported the passage of this law).

The effects of this new law could potentially be staggering. Besides the obvious disadvantages to contractors, the labor unions will now apparently enjoy even greater power to force unionization. This could be very detrimental to small business in this State. But, keep in mind, the law is new and no interpretative regulations or decisions yet exist. Many have argued against the constitutionality of such a wide-sweeping and overreaching piece of legislation. However, until the law is repealed or amended, contractors take the conservative route.

Requiring that each independent subcontractor incorporate or otherwise organize is impractical. Fortunately, requiring incorporation is not required, only the most conservative approach recommended by many practitioners. I advise that contractors utilize an independent contractor agreement drafted specifically to comply with the provisions of the new law. Any contractors already using such agreements should have their attorneys review them to ensure compliance with the Act.

Contractors need to maintain avoidance of the qualifications typically defining an employee under Federal and/or State law. This includes control over the subcontractor, including hours, equipment, methods of work, among other items. Thus, any independent contractor agreement should specifically address the qualifications used to determine the definition of an employee under all applicable laws, including the Act.

Mr. Philip A. Nicolosi provides legal services concentrated in the areas of business and corporate law, e-commerce and technology law and real estate and commercial transactions. Mr. Nicolosi owns and manages the law firm, Philip A. Nicolosi, Ltd., providing legal services throughout the northern Illinois region.

Mr. Nicolosi is a 1998 graduate of the University of Iowa and received his J.D. in 2002 from Northern Illinois University.

Brookfield Illinois – Affordable Homes & Low Taxes Just 30 Minutes from Chicago

Brookfield, Illinois is real estate rich and a unique lifestyle community that many are seeking without the high price tag and real estate tax burden.

About Brookfield:

Being dubbed as the new “Oak Park” and only 30 minutes from Chicago, Brookfield offers a community “evolving” with many recent residential developments and re-developments with single-family homes, townhomes, condos and row houses that offer gourmet kitchens, loft size rooms, high ceilings, granite counters, extended outdoor living space with wrap around decks and porches with a modern yet vintage charm. There is future retail development including improvement of the Ogden Avenue corridor and a balanced village improvement plan.

Brookfield is bordered by Riverside, Lagrange, Lagrange Park and Countryside. All are neighboring communities and each one has something special and great to offer. Beautiful home styles from vintage Victorian, Craftsman and Bungalows to the modern Bi-level and Ranch style homes are a classic design of these areas.

The Brookfield area boasts many merchants including boutiques, eclectic restaurants, entertainment, wine bars/bistros and some of the top rated schools in Illinois. And not to forget, home to world famous Brookfield Zoo. Brookfield also offers great churches and recreation with family friendly parks and the Salt Creek Bicycle Trail, which starts in Bemis Woods South and continues east 6.6 miles to Brookfield Woods, directly across from the Brookfield Zoo.

Future Development:

With a nearby future development at Ogden and Lagrange Road, plans include for a mixed-use development, which will include multi-story condominium buildings with mixed retail segments. A successful retail sector means a booming housing market. Commute time via nearby Metra is a short 20-25 minutes to the Loop and the community is also located strategically near major highways I-294, I-55, and I-290.

So, what is the first thing you should do when starting your search for your dream home? If you need to be close to the city yet seek a Chicago suburban lifestyle you need to find a great local area RealtorĀ®. Homes are bountiful right now; it’s a Buyer’s market. But if you do not know where to begin, it can be very overwhelming. Whether you are relocating from another state or another part of a Chicago neighborhood, you will need someone on your side helping you with market knowledge and an area expert.

Housing Value:

Ask yourself what you are looking for in a community? Finding a great home is one thing, but you have to consider future resale value when you go to sell down the line. The median price for a single family home is about $230K but Brookfield offers new development and re-developed housing as well. Does the community offer good schools? Village/community improvement goals? Good real estate tax use? Are these tax funds being utilized correctly with community development and improvements? Does the community offer a balanced residential/retail and commercial land-use make up?

For a community to thrive there are many elements involved and a leadership and community involvement that is important for future growth.

Brookfield is one such community. With goals being reached and improvements being made, the area is in the “baby stage” of boom.

If there is one place to start looking for a great home, it’s in Brookfield, Illinois. Nice parks and next to forest preserves, offering great schools, churches, shopping and recreation, it’s all here!

Come and visit us and see for yourself, see why Brookfield is a great family and lifestyle community!

Something Employers Should Think About Before Buying Illinois Group Health Insurance

Every business owner faces the harsh choice of offering insurance plans to his/her employees. Many employers opt not to, feeling that either the costs would be too great or the process too difficult to bother with. Both of these statements are untrue. Illinois group health insurance is ideal for any small business owner. There are some huge advantages of having a group plan over employees having individual policies. One of the many advantages that employees truly appreciate is that no conditions are excluded.

In keeping with the theme of savings, many Illinois group health insurance plans are tax deductible. In fact, some of them can be deducted completely. That saves you money as the employer and saves your workers money on their payroll taxes as well. Also, having a group insurance plan gives you complete control over which benefits you wish to offer to employees, so you won’t end up paying for services that you just don’t need.

Unfortunately, there can be some conditions with Illinois group health insurance plans. One of these conditions is usually going to be an insurance imposed minimum number of employees that are purchasing the plans. Basically, if not enough people are taking the plan provided, the companies can cancel your coverage. Another major condition is a minimum premium percentage that must be paid by you, the employer, which is usually 50% of the employee’s rate. Fortunately, these “problems” can be sidestepped. For one, the tax deductible nature of these plans balances the employer minimum fee and, and the other condition can be avoided by simply choosing your plan wisely. That is another area to cover.

Most of the major insurance companies in America offer Illinois group health insurance plans. However several smaller companies have group insurance plans as well. It can be difficult for even the most experienced of employer to figure out where competition and jargon end and decent insurance coverage begins. Luckily, you don’ have to do all of the work by yourself. You can save yourself a lot of hassle by having the right type of agent.

Illinois Bankruptcy Laws

Debt Relief Solutions – Understanding Illinois Laws about Bankruptcy

Illinois bankruptcy laws for those residents who file Chapter 7 bankruptcy include exemptions as long as the person filing is a single person and the property is in their name only. This list is complete and anything not on this list will be liquidated if it has any value. If you are seeking more information about a specific case, you need to consult a bankruptcy lawyer for assistance.

Real Estate and Vehicles

– Cars and vehicles up to $1200
– Real estate that has value up to $7,500
– Wildcard: personal property that is valued up to $2,000

Retirement Accounts

– $1,000,000 worth of traditional or Roth IRA
– Pension for civil service employees, county employees, disabled firefighters, widows and children of firefighters, firefighters, general assembly members, house of correction employees, judges, municipal employees, park employees, public library employees, police officers, sanitation employees, state employees, state university employees, and teachers.
– Retirement accounts that are tax exempt: S, 401(k), 403(b), SEP, money purchase plans, profit-sharing, and defined benefit accounts

Personal Property/Possessions

– Family photos
– Bibles
– School textbooks
– Clothing
– Health needs
– Funds from personal injury up to $15,000
– Tuition trust funds
– Wrongful death funds
– Sold exempt property proceeds
– Trust funds, cemetery funds, care funds, etc.

Public Benefits

– Public assistance
– Social security
– Veteran’s benefits
– Compensation for crime victims
– WWII restitution for Aleuts and Japanese-Americans
– Occupational disease compensation
– Worker’s compensation

Trade Tools

– implements, tools, and books up to $1,500


– 45 times the federal or state minimum wage, or four-fifths of the earned but unpaid wages, depending on which is higher.

NHM1.COM is a consumer resource offering financial and insurance related services. Our affiliates, single specialized companies within each field, have decades of experience. Our services offer customers seeking help with debt consolidation,debt settlement, debt negotiation, credit repair, home financing, health and life insurance, the ability to improve their financial and insurance exposure. [http://nhm1.com]

We have committed our resources as a Team to help Americans just like you find financial freedom. Our ultimate goal is to help you solve your financial woes so you can build a strong sustainable fiscal future.

Tax Lien Investing FAQs

Recently I sent an e-mail out to my subscribers asking them some questions. I wanted to find out what it is that most people want to know about tax lien investing. I got a lot of good questions and I won’t be able to answer them all in this article, but I want to try to answer those that were asked most often and that weren’t answered in my new free video course.

I especially like to answer questions that start out with the words “How do I… ” or “How can I… ” This type of question shows me that someone is really interested and is ready to take action. So let’s answer some of these types of questions that are not answered in my video series. So here are some frequently asked questions about lien investing.

Q1: How can I buy tax liens or tax deeds without going to the auction?

A: In most states you have to attend the auction in order to bid, or have a representative there to bid on your behalf. But there are 2 ways that you can purchase a lien or deed without physically going to the sale. A few states do have online auctions, but not all counties in these states conduct their auctions online. Usually just the larger counties do. Many counties in Florida, California, and Arizona have online tax sales. And I know that some counties in Colorado and Illinois have online tax sales as well. Another way that investors have bought lien and tax deeds without going to the sale is to bid on left-over liens, this can usually be done through the mail. The only problem is that as lien and tax deed investing become more popular, there are less and less good properties left-over after the tax sale.

Q2: I don’t live in the US; can I still invest in Tax Liens or Tax Deeds?

A: Yes, in most states you can invest in liens and tax deeds even if you are not a US citizen and do not live in the US. There are a couple of states that you have to be a resident of the state to invest, but these are not the most popular lien states and they don’t have online sales. All you have to do in order to purchase a lien is to fill out a tax form called a W-8BEN form. In order to complete this form you will also need to apply for an Individual Tax Identification Number (ITIN) if you are bidding in your own name. If you are bidding using a business name, you must apply for an Employer Identification Number (EIN). This is only for tax liens. You do not have to do this to participate in a tax deed sale.

Q3: So how much money do you need to get started with tax lien investing?

A: The beauty of lien investing as opposed to tax deed investing and other types of real estate investing, you can start with a very small investment. The first very profitable lien that I purchased started with an initial investment of only a couple of hundred dollars, on a small sewer lien. Then I was able to pay the subsequent sewer taxes the next couple of years and instead of trying to foreclose I just kept paying the subsequent taxes. After a couple of years, the homeowner moved out of state and stopped paying the taxes on the property, so then I got to pay even bigger payments $5000 over the next couple of years. The lien finally redeemed and I collected 18% per annum on most of my investment plus penalties.

Q4: How often do you acquire the property with tax liens?

A: In the state of NJ where I invest, very, very seldom do you get to foreclose on the property. If you are interested in owning property than tax deed investing or redeemable tax deed investing is the way to go. Only about 1% of liens will not redeem and of those properties, once you start the foreclosure process about 80% will redeem sometime during the foreclosure process. I’ve been investing for about 6 or seven years and I haven’t foreclosed on a property yet. I do have a couple of liens that I could start foreclosure on right now, but I know that when I do, they will redeem, so I just let them go.

I know some investors who have foreclosed on a couple of properties, but either it is not recent – we’re talking a few years ago when property values were not what they are today and it was much harder to get a loan, or they have a really huge portfolio with thousands of liens.

Q6: Are there risks involved in this type of investing? What are they?

A: Yes, there are risks involved and that’s what the gurus leave out, they make it sound so easy. They like to use the term “Government Guaranteed” to make people think that they can’t go wrong with tax lien investing, that the government guarantees that they’ll get paid on a lien. That’s really not true, what they mean by “government Guaranteed” is that there are laws that protect the investor but you not guaranteed to get paid. The guarantee is the property. Tax Liens are guaranteed by the property that you have a lien on, so if you buy a lien on a worthless piece of property, then you made a poor investment and it is possible that you could lose your money. Yes, there is risk involved, but that risk is minimized by doing your due diligence on the property before you purchase the lien, just like you would do due diligence on property before giving someone a loan against it. If you do your due diligence properly than tax lien investing is a very safe investment because it’s secured by something tangible, not just a piece of paper.

One of the things that I do in my courses, John, is teach people how to do due diligence for tax sale properties so that they can totally reduce the risk involved with tax investing.

Q7: Can you invest in tax liens and tax deeds in your IRA?

A: We all want to keep more of those profits for ourselves and not give half of it away to Uncle Sam. The good news is that you can use money in your IRA or Roth IRA to invest in tax lien certificates or tax deeds, but only if it’s a true self-directed IRA. With a self-directed IRA, your profits can grow tax-differed, and with a Roth IRA, your profits can be totally tax-free.

In my courses I have 2 audios from different experts from 2 different self-directed IRA companies that explain how to do this.

State Treasuries of Alabama, Kentucky, Illinois, New York and Michigan

State treasuries serve as the banks of the state; they also manage the money of the state, and therefore serve a vital role in their overall economic success. Universal among the states of Alabama, Kentucky, Illinois, New York and Michigan is the role of the treasurer and their attitudes on university education. Each department functions to invest state funds in order to maximize profit, thereby increasing their revenue so that the public can be better assisted. Each state has an unclaimed property fund to help lost items reach their owners, and each state has a savings program implemented to assist parents in saving for their children’s education. Below is a short description of some of the more interesting programs and information about each state:

Alabama State Treasury

* Prepaid Affordable College Tuition Program(PACT):This investing plan helps families by allowing them to purchase a contract to prepay 135 semester hours of college tuition at any college or university around the country

* The Security for Alabama Funds Enhancement (SAFE): This program involves banks in securing their own funds by requiring them to pledge collateral to the Treasury Department for a collateral pool

Kentucky State Treasury

* The Treasurer position was among the first created by the state constitution in 1792; they are elected every four years and act as the chief elected fiscal officer

* KEES program: This is a lottery program set up to raise money to send graduating high school seniors to college

* Kentucky Teachers’ Retirement System: Oversees the pensions and savings of teachers

Illinois State Treasury

* Agriculture and Alternative Agriculture Loan Program: Offered to farmers or agriculture specialists who produce alternative products such as grapes, strawberries, or hydroponically grown food. Also for those who are in the Christmas Tree growing, fish farming or wine-making business

* Bank At School: This program helps elementary school children learn the basics of money management by partnering a local bank with a school to run an in-school bank.

New York State Treasury

* Linked Deposit Program: This program was started to encourage small businesses in the state to invest. Banks offer a 2-3% lower interest rate on loans

* International Fuel Tax Agreement project: this plan simplifies how commercial motor carriers report their fuel use taxes. With this plan they can buy one license that can be used throughout IFTA jurisdictions.

Michigan State Treasury

* Taxable Tobacco Settlement Asset-Backed Bonds: the proceeds from the sale of these bonds is used to buy tobacco receipts and proceeds are deposited in the 21st Century Jobs Trust Fund to create more high-tech jobs.

* Michigan Municipal Bond Authority (MMBA) : Established in 1985 to give schools and other areas of government a different financing source to use for certain projects

Illinois Teacher Retirement System – The Unknown Heist of Your Retirement


This article is probably not going to win me any popularity contests. If you don’t like listening to some possible hard facts, I would suggest you quit reading through this now. But, if you are practical individual who would rather be prepared for the worst of while hoping for the best rather than simply anticipating the best; this is the most important article you’ll go through all year.

What’s in this article?

– A very fast background on pensions

– Where the future of your Illinois pension may be heading

– Why there is no way to lose by beginning to save in an outside retirement account in addition to your pension

Very swiftly, here is how pensions work:

Each year workers contribute to the pension it becomes a little bigger and whoever is administrating the pension (in your case, the state of Illinois) also needs to put funds in yearly for the pension to remain healthy. With these combined pension contributions, the accounts should be big enough that the revenue generated on interest is sufficient to take care of the payouts to current retired workers without having to dip into the pension’s principal.

So that is simple. Workers pay, the state also gives, and the retired workers get paid. Pensions are the standard in the public arena. They also used to be the standard in the private arena until the last generations, when companies started shifting to 401(k)s.

Why the shift?

I just read a book called Retirement Heist by Ellen Schultz, an investigative journalist for the Wall Street Journal. If you do not have enough reasons to be mad at private enterprise as well as our state and federal governments, go through this book. Much of the book was on the downfall of pensions in the corporate world but that tale has a very direct link to your public pension. It is important for you to know this history.

Many of our nation’s big companies had very well funded pensions. Overfunded actually, often having around $1.50 for every $1.00 they were expected to owe to their current and future retirees. But through a line of hidden methods and exploitation of tax loopholes, corporate management (aided by independent financial consulting firms) was able to reap profits and gains from their pension surpluses.

After plundering their employees’ retirement account for many years, the pensions became underfunded. The corporate executives assigned the blame to their aging staff, the retiree “legacy costs”, and “spiraling” individual medical costs for employees and retirees. They clearly did not discuss or display the measures they took that transferred huge dollar amounts from their employees/retirees to revenue for their shareholders (and therefore additional bonuses and contract extensions for the executives).

They were willing to give up the benefits and retirements of their staff for fast and fleeting profits. The benefits would have paid their employees for years, but when the new financial year starts all profit and revenue numbers go back to 0.

That is why you no longer see very many individual companies providing pension programs to staff and why the 401(k) has become the standard. I do suggest reviewing the book to see all the ways they were able to take from their employees’ pension; it is truly dreadful.

But allow me to exhibit how these issues are pertinent to you and your pension.

Unfortunately, the very same financial consulting firms that aided the corporations to hide pension cuts also functioned by helping state governments conceal and disguise broadening pension deficits and liabilities. These financial consulting firms gave political leaders the tools to avoid fulfilling their pension payment obligations for years at a time.

This lack in funding allowed the law makers and politicians to generate cash for popular programs without increasing taxes for the general population. By doing this, the state politicians were made out to look like community champions and budget prodigies.

Lastly, just as the corporations finished up plundering their pensions, they began placing the scapegoat tag on their staff and retired workers. We are now seeing some states,(as well as some groups + organizations) putting the same scapegoat label on the public workers and retired public workers. In my home state, Illinois, some highly effective groups are getting a lot of backing and media coverage by placing much of our state’s individual issues on the “greedy” teachers and other public staff.

These groups have discussed the complete outliers who receive big pension payments (who were often, and obviously, politically connected), ignoring the modest pension benefits of the common public teacher or worker.

Of course, the real causes of budget and pension deficits are the self-serving politicians results who approved skipping out on contributions and passed the funding obligations to future generations (and, conveniently for them, future government leaders). They and the financial consulting companies functioned as their accomplices.

There are a few more factors to consider as well:

1) When the market took its big drops in 2008 + 2009, if your state’s pension account was not in excellent shape, then it most likely had to sell some of its holdings while they were cheap to pay their current obligation to retirees. This goes against the #1 procedure of investing: Buy Low, Sell High.

2) Furthermore, when this happens the account is becoming smaller rather than greater and places the pension in danger of not being able to create enough revenue to pay the benefits of future years without carrying on down the path of selling off assets.

3) Public pension benefits are calculated according to salary and years of service. It is common that the revenue in the method are the standard of the best X years. When benefits are calculated according to this method, an individual has significant incentive to press up their last few years of pay as much as possible. For example: A firefighter or police officer might work lots of overtime hours in their last few years. A teacher may take on more extracurricular assignments or responsibilities to boost their last years of pay and generate a substantial boost in benefits for the rest of their lives.

4) Salaries in the last decade have increased more than the stock market which indicates that required payments for the last several years and next few coming years of retirees have grown at a greater rate than pension funds have.

5) In addition to that, large groups of the baby boomer generation are retiring each year. This is further increasing pressure on pension funds.

6) It is also expected that over 3,000,000 of that same baby boomer generation will live to 100 or older. Enhancements in medication will increase how long retirees will be owed far longer than what current pension predictions account for.

7) Finally, pension fund managers may feel (and often actually are) compelled to take higher levels of risk to fulfill the investment return projections of the state.

Near the end of Retirement Heist, Ms. Schultz says “If employers [read: lawmakers for public pensions] continue to control the retirement system and manage it for their own benefit, then within our lifetimes, ‘retirement’ will inevitably revert to what it was in the 1930s and before. Society – and taxpayers – will be paying for services to support the millions of elderly, formerly middle – class Americans.”

The takeaway here is you should consider finding an additional way to save for your retirement along with your pension. This is to assure your retirement dollars will both outlive you and be sufficient to cover all of your expenses.

It has become extremely clear that even if you work for the most financially stable company in the world or for the state with the most well funded pension, you cannot 100% rely on that company or that state to provide you with something as important as your retirement. It is on all of us to take care and responsibility to assure we can leave the workplace and enjoy the retirement when we want to and the live the way we want.