MIDDLE CLASS DISAPPEARING? TOO LATE FOR BLAME!

Many of us dreamed of a good job, nice house, great family and never having to worry that all that will go away.
Slowly – or perhaps not so slowly – it may be.
In August 2012, Kansas City Star columnist Mary Sanchez took a look at the problem, thoroughly examined by reporters Donald L. Barlett and James B. Steele in their book, “The Betrayal of the American Dream.”
The book details how the middle class is eroding, and how those who consider themselves part of the middle class are voting in favor of people and policies that may be against their own economic interests.
Barlett and Steele, according to Sanchez, point to 1985 as a pivotal year. From 1950 through 1985, the number of American workers with defined-benefit pension plans grew. Since 1985, employers have killed 84,350 defined-benefit pension plans.
These pensions, combined with Social Security – also in peril over time – kept the middle class in the middle class during their elder years.
One may argue that pension plans with employee contributions, combined with company matches, are even better for the employees. That certainly may be true if the employees contribute to or near the maximum allowed by law, AND the financial markets behave.
In recent years, the behavior of the financial markets has been less than stellar. Companies and other employers have had difficulty sustaining their pension plans. The Baby Boom generation is retiring in earnest, thus stressing any type of pension plan.
BLAME NOT IMPORTANT! WHAT TO DO NOW?
Who is at fault here? That’s no longer important. The important thing is what workers do now.
If you have a job in which working past normal retirement age is tenable, that’s an option. If that is not an option for you, you probably need a Plan B. There are many Plan B options out there. To check out one really good one, visit www.bign.com/pbilodeau
If you have a pension that has not gone away, consider yourself blessed. You’ve worked hard for it and certainly deserve it. However, others who’ve worked just as hard may not be as lucky. Their employers have broken their promises. Or, their employers never made the promise. Or, their employers have stopped making promises. If you have contributed toward your own pension, you will still have something. But your elder-years lifestyle, or perhaps your current lifestyle, hangs in the balance.
As many advocate less dependence on government, they are in effect advocating more dependency on employers – and many employers like that. Many employers like to see a certain amount of desperation among their staffs. They want people not to get too comfortable in their jobs. They want to maintain the right to break a promise if it proves too difficult to keep.
As an employee, there is little YOU can do about that, other than to leave. The goal becomes to hang in until YOU decide it’s time to go. That may not always be possible.
Consider carefully your own economic interests before making any decision. Don’t be fooled into thinking you’ll be taken care of, by either government or your employer, when neither may be the case. Not all pensions – even those from the government — will be guaranteed.
If you are young, PRESUME no one will take care of you. If you are older, and have been jilted by your employer, find a Plan B. Try not to work longer than you want to – easier said than done, certainly.
It’s not a matter of what’s happened and whose fault it is. It’s much too late for that in most cases. It’s a matter of how YOU solve YOUR problem, even if YOUR problem is not YOUR fault. Choose carefully.
Peter

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