America's Government Pension Pain


By Dr. Glenn Mollette

Stories of struggling government pension funding have abounded the last few months. Reports of changing the retirement scenario for state employees are dominating the conversation in states like New Jersey, Illinois, California and Kentucky.

Seventy-five year old retired Americans aren't interested in going back to work. However, if state government pensions are cut some may feel like they have to.

Already, Wal-Mart, McDonalds, Target, Starbucks and scores of other retailers are filled with America's seniors trying to at least make grocery money to survive during their senior years. The picture of an 80 year old who has to work just to make payment on his government subsidized housing and to afford a few groceries is not a pretty picture of America.

Americans grew up in the sixties and seventies believing that someday most of us would be millionaires. During Jimmy Carter's Presidency and runaway inflation era all the projections concerning 401k-pensions were that they would yield at least a million dollars in savings. A friend of mine who recently retired and paid into a 401 k annuity plan prescribed by his company for 35 years had approximately $350,000 saved to live on the rest of his life. That sounds like a nice chunk of money but it won't go far.

Take for example a state government pensioner whose retirement is $4,000 a month. Some are a bit less and many are a lot more. However, this is $48,000 a year plus medical insurance benefits. A state government employee who retires at 52 and lives for 30 years will collect $1,440,000 plus occasional cost of living increases, plus health insurance.

It doesn't take a genius to figure out that a defined benefit retirement will produce a lot more yield over a lifetime than a 401k-pension. A 401k requires a very grueling disciplined lifestyle of saving lots of money and doing without today in hopes of having money for the golden years. Most of America's current workers cannot fathom of trying to save $10,000 to $18,000 a year into a retirement plan because they need every penny today to live on. College loan debt, house payments and often one or two small children consume every penny. By the time people start seriously paying into a 401k-pension the race is on. You can't build much in 20 years unless you are paying $15,000 or more a year into a fund. Thus, most people need 30 to 35 years today to accumulate much money. A government pension that promises you $4,000 to $5,000 of money every month the rest of your life after working 28 years is a deal that is hard to beat.

Government retirements and other industries for years have afforded their retirees defined benefit retirements secured on the backs of what other people will pay into the fund. Social Security today is in trouble because the money people paid into it was not kept in reserve for the retirees. Instead we have spent it on Vietnam, Afghanistan and anything the government wanted to spend it on. Thus, we are already being warned that in 15 of so years there will not be enough people paying enough money into Social Security to fully pay America's future retirees what was promised.

One major problem we are trying to survive as Americans is the politicians who have been in office for so many years. They have taken care of themselves and failed Americans. Sadly, we keep electing them, and they keep failing us.

Saving American's pensions will take an all out effort. We can't just kick the can down the road. Eventually there will be no more money to borrow because the ability to pay it back will be impossible which is where we are throughout our country.

I do believe Americans will do their part if government will do its part. Most pensioners would reluctantly take a painful ten percent cut if it meant saving the system. Retirees would probably be willing to work to 59, but when you start at 25 that is still 34 years of work. A combination of state pension and Social Security would be a workable solution as well.

More taxes are not the answer. A huge segment of people paying taxes in states like Illinois, New Jersey and Kentucky who are all in big trouble are state pensioners. The state pensioners can't afford any more taxes than the person next door. The idea of taxing the rich doesn't solve the issue because the rich people can all move their residency to another state including Texas, Tennessee or Florida where they don't have a state income tax.

States with increasing income taxes aren't doing so great - consider Illinois. Illinois can't afford to pay their lottery winners. A friend of mine said he was supposed to receive about $200 back on his state income tax filing but knew Illinois would never give it back to him and he was right, they didn't. They don't have the money. The new tax rate for individuals in Illinois is 4.95 percent as of July 1, 2017. Kentucky collects 6% from its highest earners. If you earn over one half million dollars a year you pay 8.97% in state income tax in New Jersey. If you earn between $75,001 and $500,000 then the rate is 6.37% in New Jersey. In Florida the state income tax is zero. However, you do pay a 6% sales tax. In Florida you do not have to pay tax on income from an S corporation.

One major plus of a 401k-pension fund is that at least it is your money. If you have saved two or three hundred thousand dollars then you can count on it. You can spend it or leave it to your children. One thing about your government pension in this new modern era is - you probably can count on it - just probably not all of it.

Glenn Mollette is a syndicated columnist and author of twelve books. He is read in all fifty states.

Contact him at GMollette@aol.com. Learn more at www.glennmollette.com. Like his facebook page at www.facebook.com/glennmollette.

More Resources


03/28/2024
The Democrats' Abundance Problem Revisited
Last week, I started revisiting my "Three Point Plan to Fix the Democrats and Their Coalition" from October of 2022. A brisk tour of the polling and political data suggested the Democrats are still in need of serious reform and that the three point plan is as relevant as ever. Here's the very short version of the plan:

more info


03/28/2024
Are Democrats Still Stuck With Biden?
Voters don't think much of the president but also remain wary of the obvious replacement.

more info


03/28/2024
What the Polls Say: RFK Jr. Hurting Biden, Helping Trump
In October, when Robert F. Kennedy Jr. abandoned his primary challenge to Joe Biden and instead launched an independent candidacy, the initial conventional wisdom was that he might hurt Donald Trump more than Biden.

more info


03/28/2024
The Twilight of the Republican 'McLeadership'
The Trump team is steadily purging the Republican leadership of holdovers from past decades. The departure of McCarthy, McDaniel, and McConnell is part of exorcising the legacy of a more important Mc whose influence is still felt in the U.S. Senate: John McCain.

more info


03/28/2024
The Funniest Media Story of the Year?
The following three things were obvious before MSNBC puked on itself in its public divorce with former RNC chief Ronna McDaniel, but aren't we glad the network didn't notice? More later, but briefly:

more info


03/28/2024
Abridging, Not Coercing, Is First Amendment's Yardstick
Under the First Amendment, the government may not abridge the freedom of speech, whether that abridging is done by coercing internet platforms or by getting them to cooperate in government efforts to censor the public.

more info


03/28/2024
Trade Cheaters Are Killing Aluminum Industry Jobs
Aluminum industry workers stand ready to do their part to move the nation forward. They just need the federal government to enforce trade laws.

more info


03/28/2024
It's Time for an Immigration Moratorium
An effective freeze on immigration could revitalize our national culture, politics, and economy before it's too late.

more info


03/28/2024
U.N. Gaza Resolution Could Lead to Lasting Cease-Fire
After 171 days of a relentless Israeli assault on Gaza, the United Nations Security Council approved a resolution calling for a cease-fire in Gaza, with the United States abstaining. It's a breakthrough that must be built upon.

more info


03/28/2024
Biden's War Against the Jews
Biden claims he is a lifelong friend of the Jewish people and a Zionist, but these empty words are cover for a decades-long antipathy

more info


03/28/2024
'Fairness Initiative' Tackles Too-High Government Pay
Governments at every level ought to cap public-sector wages and benefits at private-sector comparables.

more info


03/28/2024
My Friend Joe
I write now, in the worst pain and shock, with news of my friend Joe Lieberman's death just moments ago. I write because I know what his critics will be quick to write, what news reports have already re-circulated.

more info


03/28/2024
Why I'm Resigning From the Biden State Department
Since Hamas' attack on October 7, Israel has used American bombs in its war in Gaza, which has killed more than 32,000 people - 13,000 of them children - with countless others buried under the rubble, according to the Gaza Ministry of Health. Israel is credibly accused of starving the 2 million people who remain, according to the UN special rapporteur on the right to food; a group of charity leaders warns that without adequate aid, hundreds of thousands more will soon likely join the dead.

more info


03/28/2024
Gaza: Truths Behind All the Lies
From civilian casualties, the use of disproportionate force, and international biases, the mainstream narrative of the Gaza conflict often obfuscates the truth behind lies.

more info


03/28/2024
Obama, Fearing Biden Loss to Trump, Is On Phone To Strategize
As the election approaches, President Joe Biden is making regular calls to former President Barack Obama to catch up on the race or to talk about family. But Obama is making calls of his own to Jeffrey Zients, the White House chief of staff, and to top aides at the Biden campaign to strategize and relay advice.

more info



Custom Search

More Politics Articles:

Related Articles

Jimmy Lai, The Billionaire Freedom Fighter


Hong Kong police arrested billionaire publisher Jimmy Lai on August 10, releasing him two days later. His "crime" was to express opposition to the mainland Chinese Communist Party's (CCP) aggression against Hong Kong - both in person and through the newspapers and magazines that he owns.

Sorry, Environmentalists. There's Nothing Good About COVID-19


Environmentalists think they've found an upside to COVID-19. Although the outbreak has claimed over 180,000 American lives and upended the economy, it has also caused pollution to plummet in cities across the country.

The Paradox of Prosperity


In Friedrich Hayek's 1954 book Capitalism and the Historians, the late French philosopher and political economist Bertrand de Jouvenel noted a baffling historical trend: "Strangely enough, the fall from favor of the money-maker coincides with an increase in his social usefulness."

Support Freelancers to Revive the Post-Pandemic Economy


More than 50 million Americans have filed unemployment claims since the start of the COVID-19 pandemic. And business bankruptcies are expected to rise nearly 50 percent this year.

Why Fracking is a Big Issue


In my previous column, I described the “paradox of prosperity”—the strange tendency of many people who have benefited from economic advances to denounce and vilify the source of their prosperity, a sort of “bite-the-hand-that-feeds-you” phenomenon.

No Baby Boom This Year; TheVirus Has Put a Damper on Pregnancies


We’re fast approaching the ninth month of the COVID-19 lockdown and if we were going to see a coronavirus Baby Boom this year, it would be starting now, says Rebecca Weber, CEO of the Association of Mature American Citizens [AMAC].

Importing Drug Price Controls Means Fewer Cures and Restricted Access


In what is likely his final major initiative on domestic policy, President Trump last week signed an executive order aimed at reducing costs to Americans for certain Medicare drugs.

The Problematical COVID-19 Relief Legislation


Americans are known to have big hearts. When disaster strikes, Americans unselfishly and heroically extend a helping hand. That certainly has been the case in response to the COVID-19 pandemic. Nobody wants to see those who have lost income through no fault of their own also lose their place of residence or their car or even their ability to afford food.

Trump's Final Blow to Patients With HIV


The day before Donald Trump left the White House, his administration dealt one final, brutal blow to some of America's most vulnerable patients. The Centers for Medicare and Medicaid Services announced a policy that, if implemented, will put numerous lifesaving drugs off-limits to Medicare recipients.

Trump's Last-Minute Medicare Rule Deserves a Swift Reversal


On Donald Trump's last full day in office, his administration announced a policy change that would make it easier for insurers to deny medicine to vulnerable Medicare beneficiaries. Those most affected will include people with mental health disorders.

Bioethics in a Brave New World


In the late 1980s, as a pre-med major at the University of Pittsburgh, I pulled many all-nighters at Scaife Hall at Pitt’s School of Medicine. My friend Dirk and I knew the only way we would ever make breakfast at the cafeterias at the Towers or Lothrop dorm-halls was by staying up all night studying and then sauntering in zombie-like at 6:00 a.m. for eggs and pancakes. Otherwise, the typical early morning fare for me and my buddies was “O Fries” from the iconic Original Hot Dog Shop, washed down with cheap beer around 2:00 a.m.

Court Packing 2.0: Why the Supreme Court Should Not Be Changed


Six months ago, the idea of expanding the size of the U.S. Supreme Court was side-stepped by presidential candidate Joe Biden, and the issue seemed to wane. But now, “court packing” has surfaced once again—and in two forms. The first is an executive order from President Biden creating a commission to study possible reforms of the Supreme Court. The second is legislation proposed by progressive Democrats to increase the court’s size by four new justices.

Protect the Bayh-Dole Act for Our Health and Wealth


In the waning days of the Trump administration, the Commerce Department proposed a rule to strengthen the Bayh-Dole Act of 1980. If the Biden administration approves the rule -- with a few semantic changes -- Americans will continue to enjoy the fruits of university research. If it doesn't, we could lose the public-private sector alliances that turbo-charge American innovation.

Congress Must Reject Legislation that Guts Medical Innovation


Health and Human Services just issued a five-year plan to eliminate viral hepatitis, a chronic liver disease that afflicts 3.3 million Americans. The plan seeks to boost hepatitis vaccination rates, make it easier for patients to get tests and treatments, and spur more research and development of cures.

Stripping Intellectual Property Rights Would Prevent Life-Saving Cures for America's Seniors


The Biden administration just announced its support for a global effort to cancel intellectual property protections on Covid-19 vaccines.