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How to retire on $277,686 per month

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Easy. Just become a CEO at a major American corporation, as the Center for Effective Government and the Institute for Policy Studies show in their just-released report, A Tale of Two Retirements.

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How to retire on $277,686 per month

  1. 1. Originally published in the November 2015 issue of Too Much, the Institute for Policy Studies newsletter on excess and inequality. Subscribe at www.toomuchonline.org. ccc Expected monthly retirement check for David Hote, CEO, Honeywell, one of nation’s 50 largest federal contractors Annual earnings that American workers under age 50 can defer from taxes into a 401(k) retirement account: just $18,000. Annual earnings that CEOs can defer: no limit. On August 5, the Securities and Exchange Commission adopted new federal regulations that require publicly traded U.S. corporations to start annually disclosing the ratio between their CEO and median — most typical — worker pay. Corporate America had spent the previous five years lobbying fiercely to kill this disclosure mandate. *A large proportion of Yum workers have no retirement program at all. “The CEO-worker retirement divide has turned our country's already extreme income divide into an even wider economic chasm.” Sarah Anderson, co-author, A Tale of Two Retirements Sources: Sarah Anderson and Scott Klinger, A Tale of Two Retirements, Center for Effective Government and Institute for Policy Studies, October 2015. Shuttlestock. How to retire on $277,686 per month Easy. Just become a CEO at a major American corporation. America’s 100 most plush CEO retirement nesteggs now total $4.9 billion, enough to hand those top 100 CEOs an average monthly check of a quarter of a million dollars for the rest of their lives. How have America’s chief execs amassed such huge retirement windfalls? Having rules rigged their way helps, quite a bit. Total deferred savings for Yum Brands CEO David Novak, as of start of 2015 Total deferred savings of average Yum Brands (Taco Bell, Pizza Hut, KFC) worker with 401(k) $232,612,208 $70,167* American workers have to depend on 401(k)s because corporate execs have been eliminating traditional “defined benefit” pensions that guarantee workers a specific monthly sum based on years of service and earnings. 18% 35% 2011 1990-1991 % of private-sector workers in defined benefit plans Drug giant McKesson closed its pension plan to new hires in 1996. McKesson CEO John Hammergren now holds a retirement account large enough to guarantee him a $819,243 monthly check for life. The most unforgivable aspect of our current top-heavy distribution of retirement benefits? Our tax dollars actually subsidize it, in part through the contracting different levels of government do with the private sector. Our tax dollars at work $948,287

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