from Sovereign Man:
In 1875, right around the time the United States overtook the UK as the largest economy in the world, the American Express Company established the very first private pension plan in the US.
American Express had a simple goal: attract the best and brightest employees by giving them retirement security.
At the time, this was a revolutionary idea. The concept of “retirement” was practically martian.
Back then, most people worked until they were no longer medically fit to do so.
To voluntarily stop working and live out your golden years on perpetual vacation was a complete fantasy.
But a century after American Express, thanks in large part to rising prosperity in the 20th century, retirement had become the norm.
Private companies’ pension plans covered over 40% of the American workforce and millions of Americans were receiving Social Security by the 1970s.
Then in 1974 the government passed the Employee Retirement Income Security Act, establishing Individual Retirement Accounts (IRAs) to help people save for retirement in a tax advantageous way.
Fast-forwarding to 2015, we can see that none of this turned out quite like they’d expected. The state of retirement in America is now pretty abysmal.
First and foremost, Social Security is desperately, woefully unfunded.
Again, this is not Simon Black’s conjecture. The Treasury Secretary and the Labor Secretary both sign an annual report stating that Social Security is close to “trust fund depletion”.
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