Dollars & Sense: The End of Pensions?

[marmar]

The End of Pensions?
by Dollars and Sense

By Shamus Cooke | December 15, 2008


Unless things change fast, human history will show that the phenomenon of "retirement" was limited to one generation. After World War II, when European and Japanese economies stood in tatters, American capitalism could fulfill "the American dream," since there was little foreign competition to speak of. For the first time ever, workers were promised that—after working thirty or so years—they would be able to securely retire. That was largely the case...for one generation.

The second generation is having a devastating reality check. 2008 was supposed to be a watershed year for retirement: it was the first year that the baby-boomers turned 62, and the retirement frenzy was to begin (since people could begin to draw on their social security benefits). Early in the year, however, a study was conducted that found one-fourth of these boomers were delaying retirement (only the baby-boomers who were actually able to plan for retirement were studied). The economy has since nosedived, and many more retirements are being delayed. The unfortunate reality is that many who planned on retiring will work until the grave, joining the millions of other baby-boomers who never had such dreams.

The experts are calling this the "perfect storm" for retirement. Everything that could go wrong is in fact going wrong. This storm, however, was not created by supernatural forces, but the coordinated effort of big-business and their puppet politicians.

The deliberate destruction of the pension and its replacement by the 401(k) was, of course, a giant step towards attacking retirement; but now that the economic crisis has emerged, we're beginning to see just how ruinous the effects are. ........(more)

The complete piece is at: http://www.dollarsandsense.org/blog/2008/12/end-of-pensions_18.html

[Statistical]

1. Why would anyone who was planning to retire in next few years be heavily invested in stock market.?

My 401K took a beating so did my IRA but I am only 31. I got another 30 years to recover. I have no doubt the markets will recover OVER TIME.

Someone planning on retiring in 2-5 years has no time to wait for the markets to recover.

Simple rule of thumb is 100 - AGE in stocks.

20 years old: 80+ in stocks
40 years old: 60% in stocks
60 years old: 40% in stocks.

No me personally I would say EVEN MORE stocks when younger <40 and less stocks when older.

Sad thing is many people were 80%,90%, hell even 100% in stocks with less than 1 year till retirement.

[JDPriestly]

2. So, children will have to support their parents and probably live with

them in the future. That's how things worked before pensions. Of course, a large percentage of the population farmed and produced their own food and made their own clothing, so it was a little easier to find a way to feed and care for an elderly parent.

What does the author expect older people to do.

[lligrd]

3. And They Had More Children To Count On

Are we supposed to go back to having 9 or 10 kids in the hope that more means a better chance of survival?

[DailyGrind51]

4. It becomes a "six of one, half a dozen of the other" situation.

Having more kids means less money to retire on, but more people to care for you, unless they have other ideas?