The widespread attack on public pensions is explained in the media as caused by profligate promises.
But some figures in the WSJ's front page story Saturday Feb 19th on the reality facing Baby Boomers going into retirement provide a different explanation. An annual retirement income of $74,545 equal to 85% of pre-retirment income of the median household is posited. Then, based on data from the Fed, NY Life, and the Boston College Center for Retirement Research, the graphic shows that the boomers aren't going to make it. The startling number is that despite a huge industry that has grown up to advise on financial planning, The annual income from a 401(k) amounts to the grant total --- wait for it -- $9,073! That's it. The graphic in the article shows that for households with a 401(k) and no pension -- but with Social Security income of $35,000 a year -- the shortfall of reaching the 85% mark is $30,392. (I infer that the $35,000 Social Security income is based on a two=person worklife.) Households with a pension (shown as $26,500) in addition to the 401(k) and with the Social Security income still come up short of the 85% mark, but only by $3,892. Against that background it is clear that the median boomer isn't going to do well -- and so there will be a clamor for defined benefit pensions. Better kill the public employee pension so the rest of workers don't have a model to aspire to. That's the real reason for the frenzy to kill the pensions at a moment when tax receipt shortfalls provide the simplistic explanation for the campaign. Gene Coyle _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
