Thursday, December 29, 2005

Are People Living In A Retirement Pipe Dream?

Social Security and company pensions have made it possible for millions of Americans to retire and have a few good years with their families without the need to clock in and work five days a week. Are we headed back to the days when people had to work for their entire life? I'm beginning to think that's a possibility and just wanted to discuss a few of the reasons I feel this way.

When Social Security first started, most people worked for the same company for 30 to 40 years, but that's just not true anymore. When large companies started offering pensions, they were trying to get employees to stay there until they were 65 years old. Then they could retire with a fair pension which would sustain their families when they didn't have a regular paycheck coming in anymore. A pension was like a super benefit that many people counted on and the main reason they would stay with a job, even though many didn't like the work.

I still hear talk of pensions in televisions shows like Law & Order. Police officers are always talking about getting in their 20 years and having a nice pension for retirement. However, the biggest talk I hear today about pensions is the fact that companies are tyring to get out of paying them to workers who have sacrificed for years for that promised retirement benefit. If the government allows pensions to be taken away from workers, can it be that long before this same government will take away the Social Security benefits that were promised, as well?

There are some real issues that plague pensions, such as all of us living longer than we were expected to when the concept was first devised and company greed when it comes to funding those pensions for their workers. During the 1980's a few smart guys on Wall Street found a way to take over companies, steal their pension funds and become mega rich in the process. While this practice has been stopped for the most part, it does make some company executives nervous about potential corporate raiders trying to take over their company just so they can loot the company pension account.

Most of us have heard stories recently about major airlines that are in financial trouble and some are declaring bankruptcy, which will change all the rules in regards to their employees pension accounts. There is a good chance in 2006 we will see GM, Ford or both seek protection from a bankruptcy judge which will put their pension programs in the same situation as the airlines. All this is leading to my first statement about whether retirement is going to become a thing of the past and if all of us will continue to work until our bodies ultimately fail. I do see this as a distinct possibility.

It's pretty much assumed that the Social Security system will eventually become insolvent. In fact, it's broke today because the federal government takes all the surplus generated by social security taxes and spends in on government programs. They don't save any of it, they just spend everything that comes in. At the same time, the number of retires in the system grows every single month and will continue to grow faster as baby boomers start to reach retirement age.

I've just about settled myself to the possibility that I may have to work my entire life, instead of retiring at 65 or 68 years old. I really don't mind that much because I don't think I would know what to do with myself if I didn't have something to do each morning when I woke up. However, not everyone enjoys working as much as I do and many people put up with jobs they hated for years, just for the pension benefit that job offered them. These folks are going to be rightfully angry if that promise isn't kept. If pension programs are not going to work financially, someone in authority needs to step forward and level with the folks that are retired now and the future retirees that are paying into a system which will end up broke before they even reach retirement age.

This is probably too much to ask because politicians have become good at kicking the ball down the road and letting someone else deal with these kinds of REAL problems. Corporate leaders don't really care because they are going to retire with millions of dollars whether their company remains solvent or goes into bankruptcy. It's the average middle class worker which will be hit the hardest if it turns out that pensions become a thing of the past. Most of them don't even have six months pay in a savings account.

I wondered if all these retirement and pension benefits might be coming to an end even back in the 1970's. It's true that most people with pensions are still being paid their monthly income, so maybe I'm blowing this whole situation up to a higher level than it deserves. If politicians get away with taking away the pensions of folks at the airlines and auto makers by not paying a prices at the polls for their actions, it will only be a matter of time before every ones pension and Social Security will be changed, reduced or eliminated and the lifestyle of retirement might just disappear for the average worker, forever.

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