What
does Retirement look like?
Don Schmitz/Human Resource Staffing
After the Civil War, the union, in an effort to show appreciation
to the soldiers who fought so bravely instituted the first
retirement plans. Since that time government and businesses
have followed this example.
For many of us, we grew up expecting that at some time around
the age 65 we would all be able to retire and live off the
our retirement funds and the government. Today, that picture
of retirement “Entitlement” is no more.
In an effort to balance budgets, both businesses and government
are being forced to change our vision of an “entitlement”
mentality. The recession that is stubbornly upon us has dramatically
cracked our dream of retirement but the signs were there long
before this recession.
The end of collective bargaining in Madison, Wisconsin is
now spreading to Indiana and Ohio and having an impact on
Minnesota as well. This fight isn’t really about collective
bargaining as much as the inability of government to continue
to fund retirement.
The Detroit auto industry in the 60’s and 70’s
no longer exists today. The retirement programs once hailed
as the best in the world no longer exist today. It took billions
in government bail out to save these businesses.
Business failures and rising unemployment has forced fewer
companies to pay for more and more of our programs. We are
in a world economy. 60 Minutes reported last Sunday; many
corporations are relocating their corporate offices to other
countries namely Ireland and Switzerland to escape paying
high taxes. The report stated that 100’s of billions
of dollars are being lost.
In 1985, 89 of the Fortune 100 had defined retirement plans
in place. In 2010, that number has declined to 17.
So, what does the new retirement look like?
The old picture of a retirement has dramatically changed from
entitlement to the power of the individual. For those American
who haven’t had the power to save for retirement, they
will be forced to work into their 70’s. Currently, ¾’s
of Americans view Social Security as their primary source
of income in retirement.
More companies will eventually be forced to create phased
retirement programs. This will result because of need for
talent will continue to increase if our country is to be great
once again. We simply do not have the manpower to grow our
businesses any other way and Boomers will need the money.
Both national and local governments will be forced to phase
out defined pension plans in lieu of more individually controlled
401(K) plans.
Americans will slowly change their behavior of “Immediate
Consumption” to “Thrift and Savings”. Most
Americans have saved far too little to afford retirement.
For many Americans this will be difficult to accept.
If financial savings does become a reality, our country and
our businesses will be stronger as a result.
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Reproduction
of this article cannot be accomplished without the expressed
consent of Human Resource Staffing. Don Schmitz is a popular
speaker and writer on all aspects of HR and CEO of Human Resource
Staffing. Don holds graduate degrees in Education, Administration
and Human Development.
Contact Don@HumanResourceStaffingInc.com
952 854 6040
