– John Dillon is a retired teacher, pension activist and blogger at Pension Vocabulary.
On the heels of the latest WTTW Chicago Tonight debate – a contretemps which found Illinois Policy Institute spokesperson John Tillman promoting the need for public workers’ being forced into 410 k programs to (1) save the Illinois pension system, (2) give Illinois public workers the opportunity to control their own retirement destinies, (3) align the public workers retirement programs with the successes of the private worker, etc. – comes a seriously disturbing combination of studies from very disparate sources that indicate the strong possibility of a looming retirement crisis for those heading toward the end of their careers.
The Federal Reserve Board has just recently published its triennial Survey of Consumer Finances. The report is considered the gold standard for understanding the household finances of American families. Simultaneously, the Joint Center for Housing Studies of Harvard University delivered the carefully researched challenges America will face meeting the housing needs of an aging population over the next decade(s).
The full report by Mark Miller, former Sunday editor of the Chicago Sun-Times and specialist on retirement issues, can be found at the link following this blog. His piece is a sobering assessment of what the future holds for those of us unlucky enough to have been middle to lower middle class during the recession, especially if the end of a career is approaching soon.
His article also clearly identifies the pitfalls in totally investing one’s future retirement in a system designed to charge for speculation of earned money without regard for significant fluctuations in an individual’s holdings, a system originally designed as a supplementary savings plan: namely, a 401k.
Fred Klonsky 
401ks and IRA s were supposed to be the third leg of a 3 legged stool which for most people was to have included Soc Sec and a pension. Most were never big usually just a simple annuity . The 401 k were there to make up for things like emergencies and cost of living. Now only 14% of workers have an annuity type pension and half have nothing except for maybe some home equity. The Fed figures may be somewhat high. The census wealth survey came out and showed a lower average and median. The Fed oversamples the rich and the census undersamples. Its takes a family 500K to make the census top 10 and 1 million to make the feds. I may drumbeat this but it is important to have the facts to fight back against these stink tanks like IPI
Quelle surpris! Now, everyone who hasn’t seen “The Retirement Gamble” on PBS (& WTTW didn’t re-broadcast it in August, as many of the other PBS stations did), but you can see it online.
It’s not difficult to put together an Excel spreadsheet and see what it would cost to put together a 401k, a defined contribution plan equivalent in retirement to the defined benefit program it is intended to replace. The math is straightforward. It would cost a great deal more. The 401k’s I have seen are a guaranteed path to poverty.
I think we can safely assume that John Tillmand understands this perfectly well. The math is simple, easy to do. We ought to be asking ourselves what this says about the moral character of people like John Tillman.
Forgot “The Retirement Gamble” link–it’s video.pbs.org/video/2365000843
Illinois Pension Reform Conspiracy (or why a 401(k) is a foolish option, especially when it’s your only retirement plan).
Don’t be fooled by Rauner and some Illinois politicians’ saccharine prevarications about stabilizing the public employees’ defined-benefit pension plans. What some of them really want to do is reduce and weaken them so they are inevitably eliminated. Defined-benefit plans are lucrative opportunities for corporate predators:
http://teacherpoetmusicianglenbrown.blogspot.com/2013/06/illinois-pension-reform-conspiracy.html