Can You Afford to Retire?
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Join the Discussion: What are  your views on America's retirement system, given the vanishing lifetime pensions and  inadequate 401(k) savings?  If you're an aging baby boomer, can you afford to retire?  Share your story.

Dear FRONTLINE,

Thank God for your show. I have been putting money into a 401 k since I was 19 and I am 25 now. I really have not had a clue how it worked. NOBODY DOES!!!!! I am going to make all of my friends watch this.

Thank you for good journalism. It seriously changes lives

Graeme Anfinson
Fargo, ND`

Dear FRONTLINE,

I've been holding off on educating myself and planning for my retirement for some time now thinking that it wasn't an issue for me at this point in my life now that I'm in my mid thirties.

After watching this particular show, I am compelled to take action and assess my wife and my future retirement! Thank you for the wake up call.

Daniel Cho
North Wales, PA

Dear FRONTLINE,

Last night my four children and I watched Frontline. Afterward we stayed up late, talking. Frontline settled a matter that has been under deliberation for almost two years. My sons have decided to emigrate.

To sum up the reason for their leaving, they have no faith in the American social compact. They explained that they aren't leaving to live as ex-patriots, but to become contributing immigrant citizens of an EU country where the population is protected from corporate excesses. Tonight they informed me that some of their friends are coming with them.

The loss of my four young men, three of them Ivy League graduates, one a student, and their friends won't affect a country as large as ours. Their number will be replaced by the time I finish writing this by eager immigrants coming in over the southern border. Nine well-educated, hard-working, entreprenurial young adults won't be missed.

I will be joining them.

New York, NY

Dear FRONTLINE,

WOW! Your program was a real eye opener. It brings to mind my father's retirement cuts year after year. Healthcare costs rise, cost of living (gas, food) rise. Forcing a retiree to cut the essentials. I find little food in my dad's home when I visit. As a health coach, I realize proper nutrition sustains life. He visits the doctor as little as possible because he knows more money will be needed for meds.

This firmly tells me that putting all your eggs in a 401K plan, is not the best and only plan. Other income avenues must be looked at while you are working the 9-5. Build residual income in network marketing, or some other gift that is not being used.

I work to live...but it sounds as though many live to work.

Helen Breier
Duluth, GA

Dear FRONTLINE,

I am just-56 days away from retirement at age fifty-five! I am covered by the Civil Service Retirement System. I will receive about 69% of my "high-three" annual income. Talk about "dumb luck"!!

A. Aurich
Lakewood, Colorado

Dear FRONTLINE,

I am a member of one of the largest employee groups in the US. As a high school instructor, I have learned the price paid when a professional from the private sector moves into teaching as a 2nd career.

After 15 years in publishing, and being FULLY VESTED in Social Security with 40 quarters, I entered into the State Teachers' Retirement System, and learned too late that in at least 9 states, a teacher loses his or her Soc. Sec. at the rate of $2 STRS subtracting $1 SS, wiping out any benefits from the 1st half of my working life.

The Windfall Exclusion has decimated the retirement funds of thousands of teachers who have brought professional insight into the classroom. Thank you for the insights into bankruptcies and 401(k)s; this, however, is a struggle in a whole different form.

JJ Kaiser
Bakersfield, CA

Dear FRONTLINE,

The same night I watched your program on PBS was the very same night that my job called a mandatory meeting about 401K. I am 28 years old and have been saving now for over a year. I joined as soon as I was given the opportunity. I put away 8% and feel I am doing well.

Your program encouraged me to research and really try to understand what I am doing instead of just doing it. Thank you for the information, however, I felt like the program was more intimidating from the standpoint that it made me worry. I think that if people my age start now and put in 8-10% we will end up alright. I am going to pay close attention to my quarterly statements now and change my money accordingly. I will also put in 10% as soon as I can.

Please continue to air this program and others like it. I think a lot of people don't get involved in 401Ks because they don't understand, not because they don't want to. Keep up the great work. Thanks

St. Louis, Missouri

Dear FRONTLINE,

I am a financial advisor with a firm which specializes in retirement plans. Everyday we see situations where employees are left on their own to make investment decisions. Most employees are overwhelmed by this responsibility and often just decide to do nothing. Others rely on their fellow employees to help them invest their retirement funds.

Please encourage your employer to provide education as a supplemental benefit to your other benefit offerings. This responsibility has been given to you and you need to take an active roll in making smart investment decisions. Get help from a licensed investment representative and take an active roll in learning about your account.

Karen Vogelsang
Valparaiso, Indiana

Dear FRONTLINE,

Hedrick Smith's program on retirement was a superb intervention in an important policy issue. It was powerful, well-crafted and used talking heads in fashion that advanced the argument and engaged the viewer. I was part of his Wal-Mart program, but this is a finer piece of work because he takes a complex issue and makes it understandable without compromising or simplifying it. I hope you show it again.

Nelson LichtensteinProfessor of HistoryDirector of the Center for Work, Labor, and Political EconomyUniversity of California, Santa Barbara


Santa Barbara, CA

Dear FRONTLINE,

This may sound crazy but perhaps the government is allowing these large corporations to dump their pension responsibilities because if all us baby boomers retired as planned then there would not be enough employees in the job market. Therefore, take away our pensions, we have to work alot longer. Perhaps till death.

GT Davis
aurora, co.

Dear FRONTLINE,

Wow! You were able to encapsulate in less than hour what many of us have spent years trying to communicate. I've been working on pension and retirement issues for almost thirty years and have never seen a more concise -- and incisive -- treatment of this complex and confounding set of issues. Alicia Munnell's comments were a model of precision and Teresa Ghilarduci's summary at the end was shattering. Moreover, the Brooks Hamilton and Anna Sullivan interviews were extraordinary. They definitely should become part of the basic retirement canon. Again, congratulations on an incredible piece of work!

Randy Barber
Takoma Park, Maryland

Dear FRONTLINE,

I work for a local government. We were allowed to go back to a defined benefit plan. For the past twenty years we had a defined contribution plan, not unlike a 401k.It was a total disaster. Few if any employees knew how to invest and some lost entire balances. During the defined contribution plan period hardly anyone was able to retire. Most just went to another job. The few that did retire had to take another job within a few years. They simply could not afford to stop working.

Andy F
Burke, Virginia

Dear FRONTLINE,

Sure, companies are looking out for their shareholders and their executives -- not their employees. But surely, your program should be focussed on helping 401k participants, not just telling them that they are screwed?!

John Bogle has said that the federal govt. should seriously considering investing a portion of the social security fund in a total market index fund to keep social security solvent. That makes a very strong case for investing in mutual funds using a 401k program.

I hope you follow-up with a program that teaches people how to:(1) Live within their means(2) Identify good 401(k) plans(3) Make good choices within their 401(k) plans(4) Adjust their asset allocation as they age so that their investments are moved to more conservative investments as they near retirement.

Unknown

FRONTLINE's editors respond:

John Bogle's extended interview is published on this web site - go to INTERVIEWS. Toward the end of his interview, he also talks about the good 401(k) style retirement plan offered to federal government employees -- and why it works and fosters good savings.

Dear FRONTLINE,

I happened to catch the frontline retirement show last night. I'm a 64 year old semi-retired construction laborer. At this point in my life, I still do side jobs and also tend bar at private parties. If I didn't do this part-time work there wouldn't be much for the perks of life which we all possibly thought there might be.

When I left full-time construction work I started to draw a pension which I personally paid for out of my wage package for almost 38 years. It was a resonable amount of money, but when I look down the road , I start to wonder. I didn't have a lot of savings, as many other people also don't have.

Sometimes I feel as if, in a society that bills itself as the most wealthy in th free world, someone is missing a page somewhere. I'm not saying that business or our society has an obligation to take care of all of its members, but there is a generation of us who sort of thought that and now with the advent of high healthcare and company bailouts, legal as they are, you really have to think about it.

I hope that the younger generations realize at an earlier age that your society/govenments/companies you work for/etc/etc/et.al will bail on you a the drop of a hat, and walk away. I for one am not bitter/frustrated/etc. even though it sounds like it. I just happen to see things as they have happened. It's called realityTFD Milwaukeee

Timothy Dorau
Milwaukee, Wisconsin

Dear FRONTLINE,

I am 58 years old and retired from San Diego Gas & Electric company in December of 2004 after 23 years with the company. One reason I retired was that Sempra Energy, the holding company of SDG&E and Southern California Gas Company, used adoption of a new cash balance pension plan to disguise a substantial cut in pension benefits to its older utility company workers.

When it was formed by a merger of SDG&E and SoCalGas in 1998, the Sempra Energy took over control of the ratepayer funded defined benefit pension plans of the two utility companies. It announced that it was going to adopt a new cash balance pension plan. The Senior Vice President of Human Relations for Sempra Energy, Joyce Rowland, was quoted in the San Diego Union Tribune newspaper asserting that "not one SDG&E worker will ever be hurt by this action".

When Sempra announced individual workers initial benefit levels under the new cash balance plan in 1999, longer serving utility company workers were shocked to find that their new initial cash balance plan benefit amounts were hundreds of thousands of dollars less than what they had already accrued under the companies traditional defined benefit plans. In some cases, workers were looking at a loss of 30-50% in promised pension benefits they had earned with decades of hard work.

The difference in the new accounts meant that older workers (those over age 50 when the cash balance plan was adopted) would never be able to work long enough for the company to accrue benefits under the cash balance plan equal to what they had accrued under their traditional defined benefit plans.

Then, in June of 2003, Sempra Energy froze the utilities traditional defined benefits plans, meaning that those older workers lost their right to continue accruing benefits under their old pension plans. That left older workers no chance to accrue traditional pension plan benefits promised to them when they joined the companies. Because this right was cut off just as they reached the age (55-62) when they would have accrued the greatest amount of benefits under the traditional pension plans, older workers are losing hundreds of thousands of dollars of promised pension benefits.

The federal courts, in the 2003 Cooper vs. IBM decision, found that cash balance pension plan conversions like the one adopted by Sempra Energy are illegal, and violate existing federal age discrimination laws.

This horrible trend will continue to destroy America's pension system until Congress acts to correct loopholes in the law that encouraged companies to illegally deprive older workers of earned pension benefits.

Congress should adopt a law requiring that all the companies that adopt cash balance pension plans, in order to have those plans found legal by the courts, must provide older workers (workers over age 40 at the time a new cash balance plan is adopted) the option of continuing to accrue benefits under the company's traditional defined benefit pension plans until they choose to retire. Some companies have already done this, and have treated their older workers fairly and complied with the law. Any new pension reform legislation must hold those companies that have not done so accountable, and mandate that they make their older workers and those employees who have retired since their cash balance plans were adopted whole.

Don Wood
La Mesa, California

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posted may 16, 2006

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