In the years before the writer completed a Masters degree in tax accounting, he worked as an inspector at General Dynamics (GD). This was in the era that preceded the highly touted 401(k) plans. At that time a GD employee could pay into the company retirement program. For each one dollar contributed GD would contribute two dollars.
In the 1980s the 401(k) was introduced as a supplement to company pension plans. This was exciting news as a way of boosting retirement income in old age or those golden years when the physical body begins protesting too much activity. However some of America's top executives were not lost on seeing these investment vehicles as a great pension saving's alternative for employers. Not surprisingly from 1990 to 2010 America's share of private sector employees in traditional pension fell from 42% to 22%.
Statistically the 20% of America's most affluent had 88% in 401(k) savings accounts and averaged $308,674 in 2010. At the same time, the middle class representing 52% of Americans had on average $34,981 in retirement savings accounts, leaving the poorest 20% with just $7,543 on average.
Such unequal consequences can be blamed in part to a shrinkage of real paychecks as well as rising indebtedness. Nevertheless the outcome in the second decade of the 21st century is that the many retirees who could once depend on retirement pensions from employers must now continue to work well beyond 65 years of age.
Meanwhile, according to the Institute for Policy Studies, 71 prominent CEOs are campaigning to trip Social Security and other entitlement programs in order to address the debt crisis at the federal level. A dozen of these CEOs have over $20m in their pension accounts. The Institute calculates that at age 65 these dozen would be entitled to a monthly retirement check of $110,000 for life if they converted their holdings into an annuity. - Other Words, 11 September 2013
In the 1980s the 401(k) was introduced as a supplement to company pension plans. This was exciting news as a way of boosting retirement income in old age or those golden years when the physical body begins protesting too much activity. However some of America's top executives were not lost on seeing these investment vehicles as a great pension saving's alternative for employers. Not surprisingly from 1990 to 2010 America's share of private sector employees in traditional pension fell from 42% to 22%.
Statistically the 20% of America's most affluent had 88% in 401(k) savings accounts and averaged $308,674 in 2010. At the same time, the middle class representing 52% of Americans had on average $34,981 in retirement savings accounts, leaving the poorest 20% with just $7,543 on average.
Such unequal consequences can be blamed in part to a shrinkage of real paychecks as well as rising indebtedness. Nevertheless the outcome in the second decade of the 21st century is that the many retirees who could once depend on retirement pensions from employers must now continue to work well beyond 65 years of age.
Meanwhile, according to the Institute for Policy Studies, 71 prominent CEOs are campaigning to trip Social Security and other entitlement programs in order to address the debt crisis at the federal level. A dozen of these CEOs have over $20m in their pension accounts. The Institute calculates that at age 65 these dozen would be entitled to a monthly retirement check of $110,000 for life if they converted their holdings into an annuity. - Other Words, 11 September 2013
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