TomorrowToday.biz keeps warning Boomers about the oncoming issues related to their retirement. Its going to be a tough one, and many Boomers are likely to keep their heads in the sand for too long. The problem is that Boomers are an idealistic bunch. And, they’ve largely been working to a script throughout their lives: “Get a good job in a big company (or make a big company yourself), keep your head down, work hard (mortgage your family and your work life balance), and when you hit your 60s, there will be a pot of gold at the end of the rainbow, and you’ll be able to sit back and enjoy the ‘Golden Years’”.
But, it isn’t going to be so.
Only 7% of people can financially afford to retire and keep their current lifestyle. And that’s assuming their pension payouts were not linked to a scheme that goes bankrupt, does an Enron, or simply reneges on its duties. This last is likely to happen in North America, which has over promised its Boomers in a big way.
Another story came to my attention from this frontline yesterday. Nortel announced plans to eliminate 1,900 jobs. It will also switch to a defined contribution pension plan from defined benefit and scrap retiree health benefits for those not yet 50 with five years of service on July 1. Also yesterday, Ontario Teachers said it will increase its pension contribution rates to 11% of earnings from 8% by 2009 in a bid to cut its pension shortfall. In the United States, about 2,700 of the 29,000 private-sector defined-benefit plans were frozen by 2003.
So, says Jacqueline Thorpe, of the Financial Post of Canada, “if your job isn’t being outsourced, your health benefits are getting cut and a guaranteed pension upon retirement is becoming a faded dream. Younger workers, meanwhile, are being asked to carry an ever-increasing cost for the swelling rank of retirees.” Read her full article here (its worth it!!).
Continue reading ‘Pension ‘beast’ continues to growl’
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