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While the fiscal cancer Walker warned of continues to grow, pensioners are about to battle another type of cancer—one that is eating away at the money they thought would sustain them through retirement.
As I recently mentioned in Miller's Money Weekly, the Employee Benefit Research Institute reports that 97% of private-sector employees do not have a pension plan. They have to save for retirement through a 401(k), IRA, or some other elective savings program. Government employees often stop reading right there. I've heard comments like, "I retired from the government. I have a guaranteed pension, so there's no need for me to worry." If you really think that's true, I suggest you take another look.
Back up and consider why 97% of private-sector employees don't have a pension. Older private businesses realized that they could not meet their pension commitments and found various means to renege on their promises. I have several friends who retired from a large airline, each with a sizable pension. Of course, then the airline filed for bankruptcy, and the benefits of higher wage-earners were cut in half.
Newer private companies never offered pensions in the first place. Sure, they administer 401(k)s and have various matching programs, but funding retirement in the private sector is now the job of employees, not employers. The demise of private pensions is foreshadowing that of government pensions; reality just caught up with the private sector faster, as it usually does. Full story...
Related posts:
While the fiscal cancer Walker warned of continues to grow, pensioners are about to battle another type of cancer—one that is eating away at the money they thought would sustain them through retirement.
As I recently mentioned in Miller's Money Weekly, the Employee Benefit Research Institute reports that 97% of private-sector employees do not have a pension plan. They have to save for retirement through a 401(k), IRA, or some other elective savings program. Government employees often stop reading right there. I've heard comments like, "I retired from the government. I have a guaranteed pension, so there's no need for me to worry." If you really think that's true, I suggest you take another look.
Back up and consider why 97% of private-sector employees don't have a pension. Older private businesses realized that they could not meet their pension commitments and found various means to renege on their promises. I have several friends who retired from a large airline, each with a sizable pension. Of course, then the airline filed for bankruptcy, and the benefits of higher wage-earners were cut in half.
Newer private companies never offered pensions in the first place. Sure, they administer 401(k)s and have various matching programs, but funding retirement in the private sector is now the job of employees, not employers. The demise of private pensions is foreshadowing that of government pensions; reality just caught up with the private sector faster, as it usually does. Full story...
Related posts:
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- 'I went to sleep Friday as a rich man. I woke up a poor man'
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- The life of a retiree in modern Singapore...
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