Pension Plans Have Changed by Pat Melfi

In almost every sector, job benefits have declined, and workers have increasingly come to realize that they will need to save for themselves to have economic security. The "security blanket" of a life4time job was never available for most, but many Americans have acted as if it were. According to 2006 study by EBRI, in 2004, only 28 percent of workers ages 55 and older had been on their job 20 years or more.

In the past, only about one-quarter of workers participated in "defined benefit" plans, such as pension plans that provided annuities at retirement, but many Americans acted as if it all had this benefit. Today, employers increasingly offer "declined contribution" plans, such as 401(k) plans, rather than defined benefit plans. With defined benefit contribution plans, the ofrten decide among different investments and bear the entire risk and reward of their investment decisions. The continuing growth of of such plans requires that American workers learn the basics of investing and become disciplined about making contributions to their plan.

Despite the recent rise of defined contirbution plans, not every worker in America enjoys the benefit of an employer-sponsored retirement plan. According to officials with the Department of Labor, slightly less than half of America's wage-earning and salaried workers are covered by some type of pension plans. Of the approximately 120.4 million American workers, about 60 million public and private sector workers have no pension plans.

According to a 2007 study by Public Agenda, more Americans are working for smaller companies--companies less likely to have pension plans, or even volunatry retirement plans. For example, EBRI found that in 1993 only half of all workers in businesses with 25-99 workers had the option of an employer-sponsored retirement plan. And for businesses with fewer than 25 employees, only one-fifth had access to such plans. By contrast, at businesses with 100 or more employees, 85 percent of workers could take advantage of an employer-sponsored retirement plan.

Thus we have the need, even moreso now than ever before to sit down, get a plan together of what our lifestyle wants to be at retirement and implement such a plan. EDUCASTION IS THE ANSWER, WHAT'S THE QUESTION? Are you with me on this? This is one of the most significant issues in the life of every human being, not only, just Americans. Anybody else here remember learbning about this is elementary school, high school or even college? Not me! I am an Ivy League graduate and and never in the 5 years I attended college, do I recall hearing this topic...of course my major was marketing, so maybe it's not that important to a marketing executive. Hmmmm, don't think so...it's time for educators to start providing EDUCATION THAT MATTERS. Over the 35 years I have spent in the entertainment industry, I have met many wonderful musicians, with many #1 songs and at the end of the day are broke due to poor planning.

It's time to get self-reliant, step away from the word "entitlement" and provide for our own families. For a free financial analysis of where you really stand in today's economy compared to where you would like to be when you retire, call me at 801-792-6970.