Post by luvinretrmnt on Feb 25, 2015 11:28:38 GMT -5
You wonder why friends, family or people you know that dont have pensions talk $hit about you with your pension and the age you can retire...
In working with retired parents and their adult children, I've grown used to the comment that children have about how they "wished they had a pension like Mom or Dad had."
This condition that I call "pension envy" is due to the perception of having the "safety net" of a pension, or defined-benefit retirement plan, rather than a 401(k)-based retirement plan that provides no "defined benefit" and takes that plan participant on a roller-coaster ride of market fluctuations. The allure of the pension was also due to its ability to clearly define what a person would earn when they retire, something that's difficult to do with plans like 401(k)s.
However, the pension option that made up the sole retirement plan for so many in past generations, has disappeared for the majority of Americans. Being "on your own" with 401(k) plans and IRAs have become the replacement models for retirement plans as companies moved away from pension plans and placed those retirement responsibilities onto the workers. In reality, these options have allowed for greater investment flexibility and for many, higher returns and larger nest eggs than they would have had in a pension.
For others, it has provided an account that they have used to "skim off" assets for non-retirement needs (paying bills, vacations, boats, etc.) or a Las Vegas type of account where they have placed their savings in high-risk investments and depleted their account values. As I said, this model for retirement provides an "on your own" approach and when left to one's own devices, bad decisions are often made.
The insecurity that many feel about their own retirement brings back feelings of envy when they encounter workers, mainly of those in the public sector, who still have access to a pension plan that allows them to plan for their income levels in retirement. These feelings often go beyond just envy, and result in anger toward those with pensions when people recognize that having pensions, primarily for public workers, comes with a cost, not to the employer, but to the average taxpayer (that's me and you). I've written about this on this site in the past, but new research figures point out just how strongly Americans currently feel about this issue.
Shutterstock
A recent study by Princeton Survey Research Associates International, the same firm that does the Pew polls, shows that Americans are concerned about the burdens that public pensions are placing on state and local governments and feel that changes are needed, most of which don't include raising taxes to pay for increased pension costs for public workers.
The study shows that:
— 82% of Americans favor requiring current public employees to contribute more toward their own future pensions and benefits.
— 78% of Americans say taxpayers should get to vote on pension increases for government employees.
— 72% of Americans are concerned their state and local governments may not be able to afford public employee pensions.
The study also shows that Americans are less interested in burdening current retirees than they are in seeing solutions for those who will be new hires and eligible for pensions:
— 71% of Americans oppose reducing pension benefits that are currently being paid to already-retired public employees
— 67% of Americans favor shifting future public employees, those who haven't been hired yet, from guaranteed defined-benefit pensions to 401(k)-style retirement accounts.
— 59% of Americans favor shifting current public employees to a 401(k)-style retirement system, but only 38% of Americans support transitioning current public employees from guaranteed pensions to 401(k)-style retirement accounts if it means breaking contracts with existing workers.
I think that these numbers show that Americans have "pension envy" but they also show respect for workers and the benefits that they already have, and they value the relationship between public workers and state and local governments.
It's clear that there's a need for solutions when discussing the burdens of pensions on the taxpayer, but it's also good to recognize that on this issue, creating safe retirements for all workers is something that affects all of us. And along with that comes respect for each other, regardless of the type of retirement plan we have.
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In working with retired parents and their adult children, I've grown used to the comment that children have about how they "wished they had a pension like Mom or Dad had."
This condition that I call "pension envy" is due to the perception of having the "safety net" of a pension, or defined-benefit retirement plan, rather than a 401(k)-based retirement plan that provides no "defined benefit" and takes that plan participant on a roller-coaster ride of market fluctuations. The allure of the pension was also due to its ability to clearly define what a person would earn when they retire, something that's difficult to do with plans like 401(k)s.
However, the pension option that made up the sole retirement plan for so many in past generations, has disappeared for the majority of Americans. Being "on your own" with 401(k) plans and IRAs have become the replacement models for retirement plans as companies moved away from pension plans and placed those retirement responsibilities onto the workers. In reality, these options have allowed for greater investment flexibility and for many, higher returns and larger nest eggs than they would have had in a pension.
For others, it has provided an account that they have used to "skim off" assets for non-retirement needs (paying bills, vacations, boats, etc.) or a Las Vegas type of account where they have placed their savings in high-risk investments and depleted their account values. As I said, this model for retirement provides an "on your own" approach and when left to one's own devices, bad decisions are often made.
The insecurity that many feel about their own retirement brings back feelings of envy when they encounter workers, mainly of those in the public sector, who still have access to a pension plan that allows them to plan for their income levels in retirement. These feelings often go beyond just envy, and result in anger toward those with pensions when people recognize that having pensions, primarily for public workers, comes with a cost, not to the employer, but to the average taxpayer (that's me and you). I've written about this on this site in the past, but new research figures point out just how strongly Americans currently feel about this issue.
Shutterstock
A recent study by Princeton Survey Research Associates International, the same firm that does the Pew polls, shows that Americans are concerned about the burdens that public pensions are placing on state and local governments and feel that changes are needed, most of which don't include raising taxes to pay for increased pension costs for public workers.
The study shows that:
— 82% of Americans favor requiring current public employees to contribute more toward their own future pensions and benefits.
— 78% of Americans say taxpayers should get to vote on pension increases for government employees.
— 72% of Americans are concerned their state and local governments may not be able to afford public employee pensions.
The study also shows that Americans are less interested in burdening current retirees than they are in seeing solutions for those who will be new hires and eligible for pensions:
— 71% of Americans oppose reducing pension benefits that are currently being paid to already-retired public employees
— 67% of Americans favor shifting future public employees, those who haven't been hired yet, from guaranteed defined-benefit pensions to 401(k)-style retirement accounts.
— 59% of Americans favor shifting current public employees to a 401(k)-style retirement system, but only 38% of Americans support transitioning current public employees from guaranteed pensions to 401(k)-style retirement accounts if it means breaking contracts with existing workers.
I think that these numbers show that Americans have "pension envy" but they also show respect for workers and the benefits that they already have, and they value the relationship between public workers and state and local governments.
It's clear that there's a need for solutions when discussing the burdens of pensions on the taxpayer, but it's also good to recognize that on this issue, creating safe retirements for all workers is something that affects all of us. And along with that comes respect for each other, regardless of the type of retirement plan we have.
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Top Stories
Trending
Recommended
