Someone Else’s Health Care Could Ruin Your Retirement
Someone Else’s Health Care Could Ruin Your Retirement by Ted Bauman – Banyan Hill
Have you ever noticed how many movies are about the little guy getting revenge against the big, bad corporation?
Whether it’s kid (The Lorax) or adult movies (Wall Street), Hollywood loves to bash big companies. The abiding message is that corporations are soulless, heartless machines that will do anything to make a buck … no matter the consequences for the rest of us.
The truth is (usually) a little different.
Most corporations are run by people who genuinely believe that their decisions are in everyone’s best interests. Even executives who believe in Ayn Rand-style individualism and ruthlessness trust that in the long run, everyone is better off that way.
Indeed, from the perspective of the modern corporate executive, raised in the “shareholder value” tradition, corporations do what impersonal market forces tell them to do, period. If that means other people lose out … well, c’est la vie.
There are big market forces at work in the U.S. economy today, and if you work for a big corporation, it threatens your retirement. It may be nothing personal … but it’s still gonna hurt if you don’t adjust accordingly.
Crowding Out Your Retirement
Over the last decade, escalating health care costs, historically low interest rates and an aging workforce have made employee benefit packages much more expensive for corporations.
Meanwhile, employees are dealing with their own financial stress. Baby boomers are behind on retirement savings. Millennials are trying to keep up with student loan debts. But sluggish wage growth makes both hard to achieve.
Consequently, many people worry about paying today’s bills and financing their retirement … and they are increasingly on their own in doing so.
In the post-WWII period, most large U.S. corporations provided health insurance plans, defined benefit pension plans and post-retirement medical plans.
Defined benefit plans have largely gone the way of the dodo bird.
None of the largest 10 U.S. corporations offer them anymore. Less than 7% of U.S. employees are in one. Everyone has moved on to defined contribution pensions and 401(k)s.