Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. This is the news you need to know in the fight for a secure retirement.
Here are the top stories from this past week:
Pensions are good for CT by Xavier Gordon. In an opinion piece written for the Stamford Advocate, Xavier Gordon, Connecticut state employee and president of AFSCME Local 269, makes the case for public employees being able to retire with security and dignity. Not only do Connecticut’s public employees dedicate their careers to public service, but they also pay into the pension system with every paycheck: “This is money that we as public service workers have earned and have agreed to not receive until retirement, with the hope of providing security and stability for ourselves and our families at the end of our lives.” Pensions provide a secure retirement for public employees while also stimulating the local economy. In Connecticut, “…pensions generated $7.1 billion in economic activity [in 2016]. Each dollar invested by taxpayers into public pensions supports $3.54 in economic activity, while each dollar paid out in pension benefits creates $1.42 in total economic output here in our state,” according to the National Institute on Retirement Security. Pensions boost the economy and cost less than 401(k)s while granting the same benefits.
For passion or for money, more seniors keep working by Tim Gordon. As defined-benefit pensions have become less common, more and more seniors are forced to keep working in order to stay financially afloat. “It may be a shock for people to find that they can’t get by on Social Security alone, especially for those who claim their benefits before they turn 70. Social Security currently maxes out at $2,209 a month for those who file at 62 and $3,770 for those who file at 70.” According to Brian Asquith, an economist at the W.E. Upjohn Institute for Employment Research, “(Working) by older age groups bottomed out in the mid-1990s, when Social Security was more generous and defined-benefit pensions were more common.” Now, with many workers forced to prepare for their retirements relying only on risky 401(k) plans, the number of elderly Americans working will likely increase.
New Research Finds Growing Financial Asset Inequality from the National Institute on Retirement Security. The National Institute on Retirement Security (NIRS) released a new research brief detailing the growing wealth inequality in America, which is consistent across generations and threatens retirement security for all. “The expanding wealth chasm is putting retirement even further out of reach for working Americans,” said NIRS manager of research Tyler Bond. “Fewer and fewer workers are offered pensions, which means they must amass enough financial assets on their own to last through retirement. But our research shows this just isn’t happening. Instead, financial assets increasingly are concentrated among the wealthiest Americans, and there is a growing inequality in access to employer-sponsored plans that serve as a vital pillar of our retirement infrastructure. Unless something changes, retirement will become a luxury, and many Americans will miss out on this aspect of the American Dream.”
Be sure to check back next week for the latest news in the fight for a secure retirement!