The Broken Promise of Retirement
Is it really as political as that as in &quot;the big bad republicans ate my pension&quot;?<p>Juicy pensions are on the decline everywhere.  The company I started working for at age 23, so many years ago, in all its vertically integrated, multinational glory, provided, at the time, pensions you really could continue living a middle class lifestyle on.  I duly got into that pension plan, with the huge pension adjustments that entailed (greatly reduced ability to pay into your RRSP) but that future defined benefit pension was worth it.<p>Except that $bigco went bust, and when the dust settled, we got cash payout of the some percentage of the deemed value of the accrued pension that they could recover from the financial wreckage, and that was that.  No pension at all.<p>Now I and everyone else is just on defined contribution plans, where between your own and the company&#x27;s contribution you put in maybe 10% of what it would take to live on, per year.  The rest is supposed to miraculously come from compound gains, using the old wisdom that anyone can get 10% per year without effort.<p>What does that mean in real life terms?  Live cheap, far below your financial means - one basic car instead of his  &amp; hers SUVs, a basic house in a decent neighbourhood instead of the latest 5K square feet monstrosity and so on, and try to save a good 1&#x2F;3 of your income for the future.  Barring a financial meltdown or runaway inflation, I think we&#x27;ll make it.  The fact that &quot;runaway healthcare costs&quot; are not a factor here helps a lot, though without a company plan, you&#x27;re on your own for all dental work and (up to a certain age) all prescription drug costs.<p>Anyway the economics is simply this:  Work for 40-45 years and accrue enough to live another average 25 years after you retire.  The $$ have to come from somehwere.  You see a lot about super juicy public sector pensions in the USA where people can retire in luxury before age 50... probably outliers, as is the &quot;evil people stole the pension fund&quot; situations.  On the whole, it&#x27;s just that people live longer.