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[Commentary] © 2002 Philip Hyde, The Timesizing Wire™, Box 622 Cambridge MA 02143 USA (617) 623-8080

Eroding Retirement, 6/2002 & previous

6/02/2002   retirement warnings from the NY Times (NYT) & Boston Globe (BG) -

5/26/2002   retirement warnings from the NY Times (NYT) & Boston Globe (BG) - 5/21/2002   retirement warnings from the NY Times (NYT) & Boston Globe (BG) - 5/08/2002   retirement warnings from the NY Times (NYT) & Boston Globe (BG) - 5/5/2002   retirement warnings from the NY Times (NYT) & Boston Globe (BG) -
  1. Retirement insecurity, pie charts from Economic Policy Institute via Globe staff chart via Boston Globe, G2.
    More than 40% of households headed by someone between the ages of 47 and 64 will not be able to replace even half of their preretirement income once they stop working.
    Share of households with an expected retirement income of less than one half current income:

  2. Retirement - Report predicts many face financial woes, by Diane Lewis, BG, G2.
    Here's some troubling news for American workers.
    Despite a soaring stock market in the 1990s and the growth of 401(k) plans, many US workers will not be able to replace even 50% of their current annual wage after they retire. In all, more than 40% of working Americans between the ages of 47 and 64 fall into this category, reports the Economic Policy Institute. Of those, 20% will be living in poverty.
    [Is that 20% of the "over 40%" living in poverty then? - i.e., 8% of working Americans 47-64 overall?]
    Called "Retirement Insecurity," the study by NY University economist Edward N. Wollf is based on statistics of retirement wealth during the 1980s and 1990s when the nation was in the midst of an economic boom and many hoped prosperity would lead to rising incomes for the nation's poor and working class.
    That didn't happen, Wolff concludes in this report.
    [It never happens automatically, because of the Chesterton pan-utopian trap.]
    Instead, he said, "every group of near-retirees except those at the very top lost ground compared with their counterparts in 1983."
    The reason? Wolff attributes the reduction in retirement funds to employers' shift from traditional defined-benefit plans that guaranteed a company-paid pension to so-called defined-contribution plans such as the 401(k), usually primarily funded by employees with a small company match.
    [Not to mention the fact that many corporations switched from honoring senior employees to going after pre-retirement employees and laying them off to reduce or elminate completely their pensions. This was also popular against employees immediately before their vesting in the company pension plan.]
    "In terms of retirement investment, what should have been the best of times turns into something closer to the worst of times when you look closely at what really happened to retirement wealth," Wolff said. "The contraction of traditional defined-benefit pension plans and their replacement by defined-contribution plans appears to have helped rich, older Americans but hurt a large group of lower-income Americans."
    Other key findings from the study: [All this contributes to the weakening of American domestic markets and the gradual embrace of chronic recession in the USA. We are watching "the first become last," because, as Chesterton puts it, our assumption that "no man will want more than his share" is false and so is the assumption that there is an obvious "share" that is appropriate for each and every person. Timesizing.com has a self-adjusting definition of "share per person" in terms of employment, or working hours per week. If we can't agree first on an appropriate share of work per person, we'll never be able to agree on an appropriate share of income or wealth. The one bright spot in this study? -]
    It noted that...Social Security cover[ed] 98.4% in 1998 \of\ the 25% of US retirees who do not have pension coverage..., up from 82.4% in 1983.
    [So overall, 24.6% (98.4% of the 25%) were covered by SS in '98 vs. only 20.6% in '83. This begs the question, did the number of US retirees without pension coverage really stay the same (25%) throughout the whole of that 15-year period?]

2/28/2002   retirement warnings from the NY Times (NYT) & Boston Globe (BG) -

11/01/2001   retirement warnings from the NY Times (NYT) & Boston Globe (BG) - 10/27/2001   retirement warnings from the NY Times (NYT) & Boston Globe (BG) -

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