OPINION | 'I don't have a pension … What makes you so special?'

If your job offers a defined-benefit retirement plan, odds are good you’ve heard it before, maybe even across the negotiating table: Pensions are a relic of the past. Bolstered by slick marketing campaigns underwritten by Wall Street investment firms, employers have been successful in convincing a generation of American workers they don’t need pensions to have a secure retirement. But a growing body of research suggests the alternatives – 401(k) and other defined-contribution plans – are very risky business, and the U.S. may be headed for a retirement crisis as a result.

A March 2013 report by the New School’s Schwartz Center for Economic Policy Analysis estimated that 75 percent of American workers ages 50 to 64 – those nearing retirement, or so they think – had an average retirement savings balance of less than $27,000 in 2010. Even among higher income brackets, the numbers are grim. Roughly half of retirees-to-be in the top 25 percent of earners have retirement savings balances of only $52,000, the report found.

Of course, that’s nowhere near enough money for a secure retirement, even when combined with Social Security income. In fact, a 2010 study by the Center for Retirement Research at Boston College found an estimated $6.6 trillion gap between the money workers ages 32 to 64 will need in retirement and the money they will have during retirement.

So the next time someone asks why you think you deserve a pension, you might ask them whether they plan on winning the lottery or working into their 70s.

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Michael Moore's picture
Michael Moore

Michael Moore edits the St. Paul Union Advocate. 

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Part of the Wealth Transfer

I think it goes back to union members voting for Reagan.  Out of patriotism.  They didn't even flinch when he fired the air traffic controllers. That is the platform for a huge wealth transfer.  The economy bled manufacturing jobs. The retailers started importing from Asia in massive amounts.  The workers played along by buying everything on discount from Asia.  And the replacement jobs didn't have traditional benefits.  These movements have been cited over and over, and the lack of retirement savings is totally predictable once you take them into account.  We've been told free trade is the magic elixir for economic growth. But the lion's share of the growth fills the pockets of a tiny elite.  They don't seem to feel the need to provide any retirement income for workers. The upshot is going to be a big deterioration in retail spending with all that entails. In our current economy, no spending means no jobs. The rich have been on a winning streak for 30 years. But there will be fewer and fewer profitable investments.