What is a pension in the USA

Retirement is an anxiety-inducing topic for many. In the US, according to a 2017 census department report, 50% of women and 47% of men between ages 55 to 65 have no retirement savings.

Retirement planning is represented using the three-legged stool metaphor, with each "leg" representing social security, personal savings, and pensions. So, the idea is that if you have all three of those, you're setting yourself up for a good future.

But over time, the retirement stool is leaning heavily toward the personal savings "leg" as increasingly important since social security isn't enough to entirely support retirees — and pension plans are becoming increasingly scarce in the USA as 401(k)s have become the dominant form of employer-sponsored retirement plans.

Pensions are a type of retirement plan where the employer deposits money into it during the employee's time at a company. The amount is calculated based on the employee's salary history and length at the company. Later when the employee retires, the pension offers a monthly source of income until they pass away.

Some especially generous — and especially rare — pensions even offer survivor benefits, which provide the surviving spouse with a percent of the pension money owed to the employee.

The type of retirement plan available to you depends on your employer. Many state and local government jobs, still offer traditional pensions. However, 401(k)s are quickly taking over as the dominant retirement plan for private companies, though traditional pensions are one of several terms that labour unions may fight for in negotiations.

The value of a traditional pension is accrued throughout the employee's time working for an employer, "so the longer you work, the bigger your payoff is going to be," Parks says. The value of a pension also takes the employee's pay into consideration as well as the expected growth rate of the company.

Once an employee works at a company long enough, they become vested in their pension, which means they are guaranteed the money in their pension regardless of their position at the company — even if they get fired or move companies. Vesting is a gradual process, so if you work a few years at a company, you can become partially vested in a pension.

Some employees may not be aware that they became partially vested in their pension at a company. If you worked at a company with a pension for a few years, it may be worth your time when you retire to call back and ask if you have any money from a pension, you were vested in.

Pensions are usually either unfunded or funded: which indicates how a company is planning to pay for the pension. Money from a funded pension comes out of a pool of invested money that the employer sets aside specifically for pensions. Meanwhile, unfunded pensions are paid out directly from the company.

Here's the main difference between pensions and 401(k)s: a 401(k) is a defined-contribution plan where both employer and employee can contribute to the account and invest funds to save for retirement. A pension is a defined-benefit plan that's sponsored by the employer that offers benefits based on salary and employment history at the company. So essentially pensions are plans where the employers are set up with higher costs and investment risks. 

 

Happiness is...

Retirement for many brings happiness, but while happiness can be characterized by feelings of joy, gratitude, and contentment, how we achieve this feeling is entirely unique. For some, being happy can seem like a fleeting concept, a fading feeling brought on by success or good fortune. For others, cultivating happiness from within is the worthiest pursuit, whether it’s by slowing down and appreciating the present moment, developing a meditation practice, or reconnecting to your purpose. To quote the German-Swiss poet Herman Hesse, “Happiness is a how; not a what. A talent, not an object.”

Many of history’s greatest minds, from the ancient Greeks to modern thinkers, have meditated on the root of happiness and made some striking observations that may make you stop and think. Through these words of wisdom, a common thread to happiness just might be found — or perhaps many different threads can be weaved together to form your own personal tapestry. Below is some food for thought on happiness.

The foolish man seeks happiness in the distance, the wise grows it under his feet. – James Oppenheim

Happiness is when what you think, what you say, and what you do are in harmony. – Mahatma Gandhi

Make up your minds that happiness depends on being free, and freedom depends on being courageous. – Pericles

Happiness is not a goal…it’s a by-product. – Eleanor Roosevelt

I don’t want a job. I have eight acres of fields outside the city wall, enough for vegetables and grain. I also have an acre and a half of farmland nearby, which gives me enough silk and hemp. Strumming my zithers is enough to give me pleasure, studying Tao with you is enough to make me happy. I don’t want a job. – Yan Hui, a disciple of Confucius

Happiness is not something readymade. It comes from your own actions.

– Dalai Lama

We tend to forget that happiness doesn't come as a result of getting something we don't have, but rather of recognizing and appreciating what we do have. – Frederick Koenig

Don’t wait around for other people to be happy for you. Any happiness you get you’ve got to make yourself. – Alice Walker

Sometimes your joy is the source of your smile, but sometimes your smile can be the source of your joy. – Thich Nhat Hanh

Happiness depends upon ourselves. – Aristotle

Those who are not looking for happiness are the most likely to find it, because those who are searching forget that the surest way to be happy is to seek happiness for others. – Martin Luther King Jr.

Many persons have a wrong idea of what constitutes true happiness. It is not attained through self-gratification but through fidelity to a worthy purpose.  – Helen Keller

Success is getting what you want, happiness is wanting what you get.

– W. P. Kinsella

The happiness of your life depends upon the quality of your thoughts.

– Marcus Aurelius

The present moment is filled with joy and happiness. If you are attentive, you will see it. – Thich Nhat Hanh

All happiness depends on courage and work. – Honoré de Balzac

True happiness is to enjoy the present, without anxious dependence upon the future.  – Seneca

Happiness in this world, when it comes, comes incidentally. Make it the object of pursuit, and it leads us a wild-goose chase, and is never attained. Follow some other object, and very possibly we may find that we have caught happiness without dreaming of it. – Nathaniel Hawthorne

Happiness is something that multiplies when it is divided. – Paulo Coelho

Genuine happiness can only be achieved when we transform our way of life from the unthinking pursuit of pleasure to one committed to enriching our inner lives, when we focus on 'being more' rather than simply having more. – Daisaku Ikeda

Happiness consists more in small conveniences or pleasures that occur every day, than in great pieces of good fortune that happen but seldom to a man in the course of his life. – Benjamin Franklin

Happiness exists on earth, and it is won through prudent exercise of reason, knowledge of the harmony of the universe, and constant practice of generosity.

– José Martí

Of all the means to insure happiness throughout the whole life, by far the most important is the acquisition of friends. – Epicurus

The only way to be truly happy is to make others happy. – William Carlos Williams

Many people think excitement is happiness…. But when you are excited you are not peaceful. True happiness is based on peace. – Thich Nhat Hanh

I didn't start the fire

I was talking to a 40-year-old about how depressing the world seems to be now. We talked about inflation, the war in Ukraine, COVID, mass shootings and many other topics. She feared for her children and how they would cope. The events we are going through along with her reaction to them, will, I believe shape her children’s view of the world as they grow.

The conversation got me thinking about my youth. As my generation grew, we were fighting a “cold war” in Europe and a “hot war” first in Korea and then in Vietnam. The threat of worldwide annihilation by nuclear war was with us every day and we practiced protecting ourselves by hiding under our desks at school and our basements at home. Where I lived the winds would bring in dust from the nuclear tests and we would stay inside for a few days to protect ourselves from the fallout. 

That was the 50s in the 60s things got worse. John Kennedy and his brother were assassinated along with Martin Luther King, Jr. The US was at war internally, race issues and opposition to the war galvanized both sides and violence was an almost everyday experience, if not in person then on TV.

There were good things, my parents stayed calm and maintained a normal family life. Being encouraged to try new things and go to a new University., Also, meeting my future wife, starting new adventures, and getting married. events like Woodstock, and the moon landing also shaped me. Finally, privacy was a given, and there was no internet.

But that’s me. How about you? What were the epochal events in the country and the world that shaped you?

 

I can relate

 The following was inspired by Ken Kuhn in the Tri-Cities Seniors Action Society Newsletter. Thank you, Ken.

Cooperation, Volunteering, and Civic Participation

It is cooperation, not competition that has allowed humanity to survive over the ages. Social Darwinism theory tied with the rise of libertarianism in the 80s has led us to believe that there are limited resources, and we suffer by helping others. It’s the foundation of this belief that if you are poor, then it is your fault. The super-rich benefit by seeing the lower classes fighting. The media reinforce the lie of exaggerated individuality and narcissism that we must fight hard against. 

We must say I will love my fellow humans, I will feed the poor, I will help the sick….and, if we all work together, we can have good lives full of plenty.

Most people we run into, are good people. No one wants anyone to go hungry, nobody wants people to go without medicine or seeing a doctor, living in a decent home, all the basic stuff. We should be able to provide for everyone.

Civic participation and volunteering are pillars of our community and can help people keep a healthy, active and engaged life. These benefits can be observed in older adults who build relationships while participating and volunteering that reduces loneliness and social isolation, but also improves their health and quality of life. Civic participation and volunteering aim to help others, solve community problems, or produce common goods or results. 

Such participation conveys the idea of social action, such as helping friends and neighbours, donating to a charity or organization, or volunteering for a community organization. Organizations in our community surely need you. Civic participation and especially volunteering seem to be the key to meeting the needs of older adults, exercise, building relationships, and healthy active aging. But beyond volunteering, you can also be an agent of change by defending a social, environmental, or political cause. 

Make your voice heard in order to influence decision-making processes. Our communities have civic elections coming this Fall so be sure you get involved and give that “seniors’ voice” to making our community “age-friendly--from 8 to 80 years of age or from stroller to walker” and making our communities safe for all--including older adults.