There are many employees who are quite pleased that their employer matches their 401(k) contribution, which feels to them, to be a form of free retirement income being thus distributed to them. While they are not wrong in feeling this way, the crux of the problem though, is that as good as this may seem to the employee, things were much better when employees were receiving defined pensions, instead. Indeed, Walter W. Kolodrubetz reviewed Employee-Benefit Plans, from 1950-70, and stated, that “By 1970, contributions were nine times greater and benefit outlays fourteen times greater than they were in 1950,” which is a significant reason why the middle class became so strong during this period. Regrettably, pensions have in modern times been phased out in the private sector and thereby replaced by 401(k) plans, signifying that employees are basically responsible for taking care of their retirement, and in the vast majority of private sector jobs, it is no longer an option for the employee to be able to earn a pension with a given company.
It is quite unfortunate that within this capitalistic society, that this government has seemingly taken a hands-off approach, to seeing that corporations do their fair part to do right by their employees, by, for instance, these corporations providing their employees with a pension for their retirement years, for we have instead seen that employees are essentially responsible for taking care of their own retirement years. Also, we have to keep in mind that, after all, employees are mandated to sacrifice a significant portion of their income to the Social Security Administration, to theoretically be able to draw upon such in their retirement years, of which, this Social Security stipend is thereby supposed to be supplemented by the amount of monies put away in 401(k) accounts. However, many a person in order to pay bills and survive, has had to draw upon their 401(k) plan in the here and now so as to take care of debts and bills in the present time, thereby defeating the intended purpose of having that 401(k) plan.
Look, it would be one thing if America was a very poor nation, unable to afford to do more for those who have retired, other than to wish them well – but this is, in fact, the richest nation that the world has ever known, and thereby it is quite disappointing that this free enterprise system permits these companies to profit as much as they dare can, but doesn’t desire that they share those profits fairly with their employees, by providing them with the necessary pension needed for their retirement years. Instead, the responsibility of taking care of those who have retired without enough income is left to charitable organizations, food banks, family members, and the government through its welfare programs. While the matching of 401(k) plans by employers definitely provides a helping hand for those who have their funds matched, that typically isn’t going to provide enough financial power for those who don’t make enough income in the first place and can barely afford to divert present funds to 401(k) plans, for it is these people of the lower middle class and below, that are most benefited by a robust pension plan, but often do not have that option to avail themselves of, which thus leaves them in a very vulnerable place.