Posts Tagged "union benefits"
March 29, 2022
Boomers Lament Disappearance of Pensions
More than one of this blog’s readers said a recent article about 401(k)s was hardly revelatory. But it sure generated a lot of comments.
Ed McGrath wrote this about “Retirees with Pensions Slower to Spend 401(k):” “Well thank you for this Caption Obvious.”
Perhaps the article struck a nerve because baby boomers are the generation who mostly lost out on pensions. Nearly two-thirds of U.S. workers born in the 1920s through the 1940s – many of them parents of boomers – had pensions. But a measly 6 percent of boomers from the tail end of the wave have them.
Millennials and members of Generation Z usually wouldn’t even consider pensions in their retirement plans. But boomers at one time might’ve hoped or even expected to enjoy a retirement similar to their pensioned parents.
“I am a single woman, a former nurse, and not one job offered me a pension,” said Jennifer Lee, who is 67. “I am relying on my savings and Social Security as well as the equity in my home.” Lee expressed chagrin that a 60-year-old cousin – a rare boomer with a pension – has already “mailed in his retirement papers.”
Several readers pointed out problems with a U.S. retirement system that increasingly relies on savings – leaving retirees to figure out how much to withdraw every year – as monthly pension checks have disappeared. Ken Pidock, quoting a financial journalist, said 401(k)s lack the reliability of pensions: “Forcing people of modest means to depend on the stock market for income to pay bills after they stop working is madness.”
Paul Brustowicz, a former insurance company employee in his late 70s, feels lucky to have the security that comes with a pension, along with his Social Security and some IRA funds he converted to an annuity. “The steady monthly income lets my wife rest easy at night,” he said.
But another reader, Brian Jarvis, has a different perspective on the generational pension divide. “Yes, my father had a traditional pension that I don’t have,” he said. But Jarvis and his wife built up an ample nest egg “that my parents couldn’t have dreamed of,” he said. “We’ll be in good shape for quite a while – the rest of our lives – even without our parents’ type of pensions.”
Unfortunately, not everyone is as prepared as Jarvis. About half of U.S. households aren’t saving enough to retire at the traditional age of 65, which puts them at risk of suffering a drop in their standard of living when they quit working and the paychecks stop. …Learn More