10 July 2016

Let's make retirement great again – by bringing back a pension system

As Americans look to build their future on 401k plans, they find themselves perched atop nest eggs that are far too small

Suzanne McGee

Here’s a thought about how to make America great again: bring back pensions.

If Donald Trump really is intent on turning back the clock to the glory days of an America before globalization knocked the stuffing out of the US manufacturing sector, why stop at trade?

Part of what is making all but the wealthiest Americans feel so economically vulnerable today isn’t just that incomes have been eviscerated. It’s the fact that when we retire, those of us without pensions – a growing proportion, especially if we’re not public sector employees or union employees – are perched atop very, very tiny nest eggs.

Last year’s report from the nonpartisan US government accountability office (GAO) reminded us of the perils. Half of all households headed by Americans 55 and older had no retirement savings at all. While some long-term savers may have retirement accounts with as much as $251,600, Fidelity reported that the average amount in a 401k – the replacements to pensions that companies began rolling out during the 1980s – was little more than a third of that amount.


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