Collapse of Pension Funds: The End of Retirement?
15/12/2008 § Leave a comment
The 401(k) was the scheme of the century. Corporations offloaded their "burdensome" pensions and used the combined forces of the media and politicians to sell the ruse to the public, to the great benefit of Wall Street. Workers were told that the boom-slump cycle was over, and that stocks were a sure thing. There were additional factors to invest in stocks: interest rates were so low that investing in bonds and other less-risky instruments offered only tiny returns; and since employers stopped contributing to retirement funds, a bigger return was required.
Every safe bet for investing has been proven unsafe; the recession has left nothing untouched. After the dotcom bubble burst taking with it millions of people’s 401(k) savings the housing market became the place to invest. Now the safest possible investment, too, has turned sour.
This process is being accelerated by the newest trick of big business: declaring bankruptcy to destroy pension obligations. These obligations apply with equal weight to workers already retired, many of whom are seeing their pensions slashed in half, forcing them out of retirement.
GET OUT WHILE YOU STILL CAN!!