On behalf of all of us at the National Public Pension Coalition, we want to wish you a happy Retirement Security Week! Every year during the third week of October, we recognize the importance of defending the pensions public workers have earned throughout their working lives.
During this Retirement Security Week we’ve highlighted three things you need to know about retirement security in the United States.
1. Employers aren’t doing enough to help workers prepare for retirement.
According to the Pension Rights Center, half of older adults (65 and older) have less than $24,224 in yearly income from all sources. This amount is not nearly enough for a dignified and secure retirement.
Workers are more likely to save for retirement if they are offered a retirement plan through their employer. However, the Pension Rights Center also found that just 55 percent of all workers participate in a workplace retirement plan. Many workers do not have access to a workplace retirement plan for multiple reasons, either because their employer does not offer one, they’re not eligible because they work part-time, or they haven’t worked enough hours for their employer to qualify.
Not being able to save for retirement through one’s employer is a real issue for working people.
2. 401(k)s are not an adequate solution for retirement security.
Congress created the 401(k) with the 1978 Revenue Act, which was originally intended to be a way for employees to defer compensation from bonuses or stock options. Since then, corporations used 401(k)s to reduce their liabilities by letting workers choose their own investments, instead of collectively pooling investing for retirement among workers in a defined benefit pension. However, most workers are not investment experts, leaving them to the mercy of the market for earning income in retirement instead of receiving a pension, which is a guaranteed monthly benefit for life.
3. Pensions are great for both the retiree and the broader community.
Pensions not only provide a secure and dignified retirement; they also support communities across the country. The National Institute on Retirement Security estimates that pension spending supports 7.5 million American jobs and creates $1.2 trillion in total economic activity nationwide. Each dollar paid out in pension benefits also supported $2.13 in total economic output – making pensions a sensible solution to support workers in retirement and provide monetary benefits to communities at large.
All of us at the National Public Pension Coalition will continue advocating against politicians who want to gut pensions for public employees and spreading the word about why pensions are an important asset for retirees.