The Center for Retirement Research at Boston College just released an analysis entitled “Comparing Wealth in Retirement: State-Local Versus Private Sector Workers” to determine the wealth effect in retirement from 1996 to 2006 for former public employee versus the private sector workers at age 65, after adjusting for workers with similar characteristics of education and experience.

“What do we want?” “To protect our income gap!”

The report concluded, “The results show that spending more than 50 percent of one’s career as a state-local worker is associated with 11 percent to 18 percent more wealth at age 65.” The data for the report was produced by a long-term nationally representative study that tracked more than 12,650 people in 7.600 households since 1992, asking the participants questions about financial standing, spending habits, retirement, pensions, and employers.

The Boston College analysis determined that the dominant difference in wealth at retirement turned out to be private sector employees now rely on their self-directed 401(K) defined contribution accounts and Social Security payments, whereas public employees rely on defined benefit pension payments.

At the 2006 conclusion of the study, 78 percent of state and local government employee households in the sample received a defined benefit pension as compared to 59 percent of private sector households. This high proportion of private sector workers with defined benefit pensions shrank dramatically during the study that began in 1992. (more…)

Barack Obama’s money train has steamrolled uncontrollably across the country, compiling record-breaking budgets, deficits, and debt along its path. Now, the train is running out of fuel, and the nation’s retirement money may find its way on board, to keep the train on the tracks.

Earlier this year, the U.S. Treasury and Labor Departments began a public discussion on the aim to convert 401(k) saving plans and Individual Retirement Accounts (IRAs) into annuities and other forms of guaranteed income streams. Deputy Assistant Treasury Secretary Mark Iwry stated, “the question is how to encourage it, and whether the government can and should be helpful in that regard.” The supposition that the government is looking to be helpful with this proposal should automatically cause alarm.

The rationale for what would ultimately serve as a government takeover of the nation’s private pension system is of the same mold as the position Obama and Congressional Democrats have staked throughout the debate on health-care reform; “trust us, we know better than you”. Their assertion is that a weakened economy and a volatile stock market call for them to protect you and your interests, in this case your retirement money.

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