Total Compensation

Most Americans are not contributing enough to their retirement plans in order to comfortably retire by the age of 65.

With the gradual demise of defined benefit pension plans, in favor of defined contribution plans, it is incumbent on individuals to take responsibility for their long-term financial security.  However, because the shift to defined contribution plans is more prevalent in the private sector, there are still opportunities for those seeking a defined benefit plan in the public sector.

This option is not without negatives.  Most important is the question of pension funding and the degree of certainty attributable to the ultimate ability of the employer to deliver the promised pension benefits many decades in the future.  It is also probable that employment with generous benefits may not offer the highest current income.  Employers tend to look at total employee costs, including all promised benefits such as pension, health care and vacation, not just cash wages.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA