Private Pensions Essay

2178 Words 9 Pages
For most Americans, retirement has become a lifelong goal. To retire comfortably, you need income, and this income can come from one of three sources: savings, Social Security, or a company pension plan. The unfortunate fact is that Americans save very little money nowadays, and for anyone under forty, Social Security is a very hollow promise. For most, private pensions are the key to a comfortable retirement. When it comes to private pensions, however, most companies and employees themselves don’t contribute enough money, meaning that future retirees will have to work longer if they want to maintain their pre-retirement standard of liv¬ing into retirement.
There are two types of private pensions in America: the defined-benefit pension
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Additionally, the costs of the pensions were also supported by the federal government in the form of company tax deductions for whatever money was set aside for a workers pension plan.
Over time, these pension plans for industrial workers became very generous. Everything seemed promising, until foreign competitors with no such pension obligations began to emerge. Many of these foreign companies paid lower wages, but even worse, had products that were just as good as and sometimes better than American manufactured products. When the once strong labor monopoly began to crumble, pensions became a massive and unsustainable cost to most companies, many of which were trying to stay afloat in an extremely competitive global market. Many employees thought that their retirement was secure and agreed to lower wages with the promise of a generous pension plan. Sadly, companies began to trim the fat away in order to survive, and many American’s pensions were on the chopping block. There just wasn’t enough money in the funds to support them anymore.
Millions of Americans were faced with the harsh reality that jobs don’t last forever and economic security is not guaranteed. Many people thought that they had good unions, good pensions, and good healthcare. That isn’t the case today. Slowly, it all began to erode away at such a gradual pace that most didn’t even notice until it was too late for them to do anything about
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