The Practice of Retirement May Become Extinct

Is it possible the practice of retirement for hard-working employees could be disappearing from America’s social landscape? The concept of retirement has been the ability to relax and enter a phase of life where you pick and choose your activities, vacation with your spouse, volunteer at a local non-profit agency, go fishing, play golf and talk about old times without much worry of your financial future. 
 
Poof! Your future retirement may have left the building.
 
Attention Workers, Your Retirement Has Been Cancelled
 
The freedom to choose your post-career activities is supposed to be your reward for contributing your skills to the world of work. Will your retirement, however, be cancelled like an airline flight without fuel? Similar to being grounded, this “stranded in the terminal” feeling might be where the American workforce is headed after many years of dedicated service as they try to enter their retirement years.
 
How Did We Get Here?
 
How can a dedicated employee spend twenty-five years working for various employers and have relatively nothing to show for it at the end of their career? This is a very important question with answers that are disheartening, especially if you believe in the American Dream like me.
In our day we are seeing well-respected business people who devoted themselves to companies over the past quarter Century finding themselves in a quandary.  Consider this realistic career scenario:
 
After graduating from business school and working for five years, Susan, a dedicated corporate public relations professional, finds herself unemployed due to corporate financial cutbacks. After several months of looking for a job, taking advantage of unemployment and hesitantly tapping into her retirement savings, she survives long enough to land another position.  
 
Eight years later the same scenario happens to her due to no fault of her own. A recession caused American employers to reduce headcount and severely restrict investments and spending.  This job loss required Susan to tap her emergency fund and retirement savings, again.
 
Fast forward several years as Susan approaches the age of sixty.  She finds herself with a job, renting a home, and very little in retirement savings due to a career filled with layoffs, cutbacks, right-sizing and down-sizing, along with inadequate retirement investment returns.  The viscous cycle of on-and-off employment has eroded her confidence in the American Dream.
 
Is Corporate America’s Leaders Stranding their People?
 
In a recent Great Place to Work® Institute blog article by Lisa Ratner, director of business development team and blogger for the Great Place to Work® Institute (link here), she finds herself musing about the current state of corporate America and how little its leaders have taken responsibility for their dedicated workforce:
 
“It has been difficult for me to listen to the news these past few years, and to watch as more and more people lose their jobs, their homes, and their retirement funds. I have especially been disheartened by corporate America and the lack of responsibility taken when it came to the very people who garnered the company’s success in the first place–the employees. I feel as though I have watched the American dream begin to dissolve right in front of me. I am also not alone; it seems that more and more people are finding their voice and exclaiming that they, too, feel some aspects of corporate America are unjust and require great improvement.”
 
Coming Soon: A Tent City Near You
 
Due to the lack of financial stability, cities like Sacramento, California, according to The Sacramento Bee’s Ryan Lillis, are seeing tent cities (link here) pop-up as a means to cope with a high cost of living and sporadic employment opportunities. 
 
A New Corporate Social Contract
 
We need a renewed corporate social contract.  In exchange for the loss in loyalty to employees from Corporate America and extinction of lifetime employment, employers need to become more accountable for their actions against their people. The legal, but unethical, abuse by corporations of employment at-will is detrimental to the fabric of our society's current and future landscape. The future financial condition of American workers and their retirement hopes could be quite bleak if corporate leaders do not become more accountable.
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COMMENTS 2

Comments

Kevin,
Interesting article. Just this last week I was working with an employee that was laid off after 26 years with his company. He is in his 50's and I asked about his 401K rollover and he said he never wanted to participate because he did not trust his company to invest it properly even though they matched his contributions. He said that was one of his biggest mistakes now because he had not invested on his own either. I find this all too common with the people we deal with in our outplacement programs.
Retirement planning is something that, when employees understand, should begin now. We do retirement coaching for our client's employees as well and a recent group of employees from a company we worked with had participants ranging in age from 27 to 67. The most excited about the program were the 27 and 49 year old attendees. They got the picture, the older ones in their 60's were just shaking their heads thinking, what I have done or better said, what have I not done. I think it is not only a corporate responsibility to prepare employees for retirement but individuals need to readjust their thinking. It is far more than just financial by the way. thanks for the nice article
Travis Jones
CEO
Career Development Partners

Hi Travis,

Very good insights from the outplacement angle. It seems that our fellow coworkers in their 60's may have not quite grasped the fact retirement risk has been shifted completely to the employee. Company pensions have mostly become extinct and employee managed 401(k) and Roths are the current tools to prepare for retirement.

Many are predicting an absolute disaster in the coming years as people will not have enough money to live once they are no longer able to work.

Kevin Kennemer
The People Group

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