Work Until You're Dead? That May Be the Only Option for Many Americans

[marmar]

from HuffPost:



Jane White
President of Retirement Solutions, LLC.

Posted: September 6, 2010 09:00 AM
Work Until You're Dead? That May Be the Only Option for Many Americans


Many Americans are likely to have to work until they are dead, not as a result of Social Security shortfalls but because of their inadequate 401(k) savings or the fact that they have no retirement plan at all. This disaster has not dawned on the mutual fund companies that manage retirement assets, much less debated on Capitol Hill. Given that the first wave of Boomers is scheduled to turn 65 in 2011, Attention Must be Paid.

Here's the raw deal in a nutshell: Unless you've got Chief and Executive in your job title -- including "Ousted Disgraced CEO" -- you are probably pension-poor, even if you earn a six-figure salary. That's because only 11% of the private sector population is covered by a regular pension. Unlike during the postwar Fabulous Fifties and the Soaring Sixties when America was a "fortress economy" and almost half of the private sector was covered, currently even most employees of big companies can't count on one. Only 17 of the Fortune 100 companies offer a traditional pension to new hires.

The 401(k) plan that has replaced pensions was meant to be the icing on a pension cake when it was created 30 years ago, not a substitute for a pension. While 401(k) plans have been criticized as a risky, the more important failing is the typical stingy employer "matching contribution" equaling 3% of pay, the second lowest in the world. (There are some exceptions, universities typically contribute the equivalent of between 7 to 10% of pay.)

The rarely discussed rule of thumb for nest egg adequacy is that you need the equivalent of 10 times your "final pay," or your salary near retirement, in your 401(k) AND rollover accounts. Unfortunately, most people will be lucky if they have a little more than "one time their final pay." According to the Employee Benefit Research Institute, the median amount workers in that age group have saved is a mere $77,000 and the median salary for that age group is $61,000. What's even worse is that 50% of the private sector population isn't covered by any plan at all -- pension OR 401(k). ...........(more)

The complete piece is at: http://www.huffingtonpost.com/jane-white/post_785_b_703802.html

[BrklynLiberal]

1. and as per the repukes, that better not go on for very long.

Remember repuke health care: DIE YOUNG!!

[givemebackmycountry]

5. I agree. I'm a little more colorful in my description however...

In AMERICA if you have money (and lots of it) YOU COUNT.
In AMERICA if you do not have any money (and no hope of one day having lots of it) YOU are invisible.
Last night, I showed my 78 year old mom the George Carlin bit about "The American Dream" and how you have to be asleep to believe it.
Her response?
"I've known that for years"

I love my Mom.

[BrklynLiberal]

14. Kudos for your Mom..

[happygoluckytoyou]

44. WAIT WAIT WAIT this will work.... as we get our pay reduced to 7000 a year... we have 10 times that

in our IRA....

we are saved

FUCKING CLASS WARFARE...................TIME FOR SOME WEALTH LEVELING

[iamjoy]

2. Ah, The Good Old Days

That's how things were before the mid-twentieth century. People worked until they died. Aren't you glad we're returning to the values and traditions on which this country was founded?

:eyes:

[Rochester]

3. Horrifying. At least I have my union

to help. Solidarity forever & Happy Labor Day!

[redwitch]

30. Just got back from a Labor Day union picnic.

Good people. Solidarity!

[WinkyDink]

4. But the After-Boomers didn't WANT pensions and life-long jobs! They value FREEDOM! CHOICE!

INDEPENDENCE! PRIVATIZATION OF SOCIAL SECURITY!

[anarch]

6. I don't see any other option for myself

my "retirement plan" is a joke. Sometimes I feel like the best I can hope for is to die young.

[Lorien]

20. I'm in the same boat. I had 80k in retirement saved at age 30

but massive medical bills (unpaid by my insurance) and long periods of unemployment have wiped it out completely. I did everything that was expected of me; went to a top college for 5 1/2 years, got a mid level job at a fortune 500 company at graduation, later started my own business, bought the best health insurance I could afford as a self employed person, worked an average of 60 hours a week for the past 25 years...but, like you, the best I can hope for now is to die before I grow too old to work like this any longer.

[KT2000]

7. People will be fired

as they age and lose cognitive abilities etc.
The objective will have to be work people to death.

[dkf]

8. What may be worse is you need to work till you die but you can't find a job.

Save all you can folks. Either you will need it or your kids will.

[JVS]

9. Don't be so optimistic. People will be unemployed before their time is up.

[lib2DaBone]

10. Corporate control...whatever benfits the top 1% will be voted in by our "representatives".

Corporations and their Republican lackeys have enslaved both parents into the workforce for the price of one. They even have kids working to help afford the cost of living.

Now they are coming for Grandma and Grandpa.. work them until they drop dead.

For the Wall Street Bankers it's called the carrot.

For the working people it's call the stick.

[soryang]

11. The banksters and the health care "system" get it all

...before you retire. But is isn't enough, so social security and medicare need to be gutted.

[Uben]

12. Just remember.......

....every recession is followed by recovery. Well, so far. With our good jobs disappearing, this one might take a while. We must figure out the healthcare problem. It isn't fixed. People are still going broke, even with insurance! NAtional healthcare would take care of that aspect and free up a lot more money for people to spend. All the money the insurance companies are taking in would be back in the people's pockets and maybe they could stick back a few bucks they've been spending on it.

Personally, national healthcare would give me an additional $5-6 thousand a year savings (approx).
I'm shovin in $21K/yr on premiums and it just keeps going up.

[RKP5637]

13. What job, where... I don't think most people are going to be able to find work 'till

they die much less be self-supporting/self-employed 'till they die. On its current track, the US is going to end up being the pit of places to live on earth.

[RKP5637]

15. I often wonder how many teabaggers are part of this group and have said

- "I don't want no gov. in my health care."
- "I don't want no social security."

These people drive me up a wall with their proud ignorance and bigotry.

I had a R friend recently trying to tell me all the wealth of the country is held by those retiring, at which point I told him he was full of BS. He has all the R talking points down, but wrong as usual and no valid facts.

[Mimosa]

16. The article is true. When will Dem politicos help us? n/t

[LibDemAlways]

19. "When will Dem politicos help us?" They won't. You are on your own.

[hfojvt]

17. so much dreck and so little time

First, the rarely discussed rule of thumb is a crock of doodoo. You need 10 times your final pay in your 401K. Yeah, who wants you to believe that? Maybe people who get paid to manage 401K accounts.

Hmmm. Who wrote this piece of alarmist crap again? Jane White. And what does she do? "President of Retirement Solutions LLC"

What's next Huffpo? Maybe an article from Jiffy Lube about how I need to change my oil every 1,000 miles? Maybe an article from AFLAC about how most workers do not have enough protection if they are hurt and miss work?

Okay, enough cute analogies. Why is the article full of crap? As I mentioned, the rule of thumb. Why do they think somebody needs a retirement nest egg of $610,000 for a median income of $61,000? Because their unrealistic goal is that people need to make 75% of their pre-retirement income in order to maintain their standard of living.

First, I find that kinda insulting. They sort of assume that nobody can live on less than $45,000 a year when the fact is that something like 40 million families are already doing so.

Not only that, but they seem to ignore many key facts about retired people. First, that their taxes are lower. No more FICA taxes, not on your retirement income. So $40,000 for a retired person is the equivalent of $43,313 for a working person. Then there is the fact that a retired person may no longer have house payments and childcare expenses and - they don't have to save for retirement any more. Then there are work related expenses - gone. No more spending gas money to drive 20 miles a day, less meed for new clothes for work, and less laundry and/or dry-cleaning expenses. Less cost for meals now eaten at home instead of at a food-vendor.

Then there are taxes. Consider two incomes $60,000 and $80,000. To one extent the second person makes $20,000 more than the first. Except that the extra income is taxed. 15% for federal, 6.45% for state and 7.65% for FICA for a total of $5,820. So the difference falls to $14,180. If the first person is not paying FICA taxes at all then the difference falls to $9,590. If the second person is also paying 4% for their retirement (which is mandatory where I work) then the difference falls to $6,390.

The retirement advisor figures it is a horrible thing if somebody making $50,000 a year is forced to live on a mere $40,000 a year. Omigosh, it is a huge hit to their standard of living. Well, that kinda assumes that the person likes their job, and if they like their job then why should they worry about retiring? The reason I look forward to retiring is because I really do not like my job, and this has been true of every job that I have had. So it is a huge step up to my standard of living to not have to spend 45 hours a week, plus commute and decompression time, doing crap that I hate. Given a choice between a) living on $10,000 a year or b) doing my job so I can have $14,000 a year, I would find some way to live on $10,000 without a moment of hesitation.

[LibDemAlways]

18. Working until you are dead is theoretically possible but not likely

because employers are shedding older workers long before they reach retirement age. No one has yet explained to me what someone let go in their late 50s is supposed to live on.

[Sherman A1]

22. People in their mid to late 50's

(myself included in that group) when they are laid off are to simply use up whatever meager savings they have then go out to the woods and wait for the bears to eat them.

[LibDemAlways]

23. My husband is 59. He was laid off this past January and hunted

fruitlessly for a job for 6 months. Retirement was never an option. We have a daughter who will be starting college next year.

Mercifully, he was finally offered a spot (at a 40% pay cut) by a former co-worker he happened on through extensive networking. Had that not happened, I think he was ready to surrender himself to the woods. No kidding.

[Riley133]

37. Yep!

You got that right! I also found out the hard way that if you don't have kids, there aren't many social programs you qualify for. This is all insane.

[Curmudgeoness]

21. I have the feeling I will have to work after I am dead. nt

[pattmarty]

25. Maybe there really is a hell and that is what it is. Having to work for eternity!

:sarcasm:

[Curmudgeoness]

26. Maybe we are in hell now. Feels like it some days. nt

[raouldukelives]

24. Yes! More money for the 401k's!

Who cares what they invest your money in? You don't mind investing in big pharma, oil companies or the MIC in the hopes of making a few dollars. Why, we should stick all the SS money in 401k's as well! Then the next time we kill a million brown people you can experience the tranquility of a (somewhat) secure retirement by your Haliburton fund gains!

[old mark]

27. This is the republican retirement plan - work, then die soon...and, oh yeah,

thanks a lot!
...and don't get sick, either.

mark

[DesertFlower]

28. my husband will probably work until he dies,

not because he has to, but because he loves what he does.

[A Cooper]

29. Good Article

Will they provide us with a coffin when we drop dead while working?

[Art_from_Ark]

45. They gave Lucky Ducky a coffin

http://gocomics.typepad.com/.a/6a00d8341c5f3053ef013485dc2183970c-800wi

[Orsino]

31. We keep letting the very rich rule us, and that is the only deal we'll get.

They are the enemy, folks. It's not like we can't live with them if they are properly regulated, but all they know is wealth extraction--they are not gonna let you retire, unless it's under a bridge or in a box.

[pitohui]

32. not even a remotely realistic option

you know, some people LIKE their jobs and even they are not privileged to be allowed to "work until they are dead"

in our society, a job is a rare thing, and mostly after 50 you are going to have a lot of trouble ever getting another one

i know lots and lots of people who retired early, can't think of a one of them offhand where it happened by choice -- it was always an illness, or a company merger, or a down sizing, and so forth and so on -- many times it's a scam where the person is laid off and then taken back as a contractor so the company no longer has to provide them w. benefit -- so you're kind of working, part time, at a fraction of what you used to earn if you include your benefit package...

i have heard many people openly FANTASIZE that they will be working until they're dead, sorry, they're dreaming

there just aren't that many jobs to be had and to gamble that you'll be among the lucky few (unless your ancestor founded the company or something) is unrealistic

assume your working years will be short and save/invest accordingly is my advice

if that's not possible, fight like a lion to preserve social security, in fact, fight like a lion to preserve social security even if you do have savings/investments, you owe it to your family not to become dependent on them

[scarface2004]

33. if you have a job that is!!!

i d work if i could..but there may not be any 'work'

[Swamp Rat]

34. Work until you die.... and DIE QUICKLY!

It increases profits.

[Riley133]

35. I called to cash out my 401K

And usually if you even hint at it, they try to talk you out of it. However, in this case (last week) the dude I talked to said they were slammed with callers cashing out and there was no point trying to move the money when the fact of the matter was, people needed access to their funds.

That's how bad it is.

[DailyGrind51]

36. This means that you better know by the age of 20 how you will support yourself when you are 65!

[LiberalEsto]

38. First, I'll need to find a job.

THEN I might be able to work till I drop.

[progressoid]

39. Yep, that's what I expect to do.

[Patchuli]

40. Or worse, you were OK and thanks to Wall St.

Now you aren't. And they want to strip SS too? I think the fat cats might want to start looking over their fat shoulders...

[bullwinkle428]

41. Alan Simpson : "Mission Accomplished!!"

[LatteLibertine]

42. Sad

thing is if you shaved less than 5% of off Goldman Sach's annual profit and passed it around, it would be enough to make everyone in the US more than a millionaire.

20% of our population holds 85% of our wealth and 61% of all income.

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

I don't see things changing anytime soon because of corruption in our government. Irrational greed has pretty much screwed us all.

[Hugabear]

43. So when I turn 65, maybe I should just rob a bank

If I succeed, I'll have plenty of money to retire. If not, then I wouldn't have to worry about where my housing, food, and medical care would be coming from for the rest of my life.

[Jackpine Radical]

47. The average bank robbery nets you about $2500.

Maybe you ought to rethink that plan.

[Jackpine Radical]

46. I retired from a moderately well-paying job with 23 years

in my pension fund at age 62. The resulting pension was not enough to pay for my health insurance. I'll be 66 shortly, and am still working with no end in sight.

[IBEWVET]

48. I think this is more a govt. thing, than red or blue.

If you keep working, hopefully you will have company provided insurance and won't use Medicare. Also they need us to keep working to keep S.S. going, and taxes coming in. Then die, and they won't have to pay you S.S. Its a win win for the government.

So, do your duty, work till you die.

[Jim_Shorts]

49. Just hit play

to hear what REAL LEADERSHIP is.

http://millercenter.org/scripps/archive/speeches/detail/3305