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Labor Day and the New Retirement Realities



Labor Day, celebrated the first Monday of every September, is an annual tribute to the contributions working Americans have made to the strength, growth and well-being of the United States. The first recognition of Labor Day occurred at the municipal levels in the late 1800's and spread throughout the country. In 1894, Congress then passed an act marking the holiday in the District of Columbia and its territories.

But who was responsible for the first Labor Day?

Some records indicate that Peter J. McGuire, the leader of the Carpenter’s Union and the co-founder of the American Federation of Labor (AFL), suggested the holiday to honor those "who from rude nature have delved and carved all the grandeur we behold."

Throughout the years, Labor Day has undergone a change in how the holiday is celebrated. Its origins saw massive parades, political speeches and huge festivals where families would celebrate the American Dream. Today, it has moved from such festivities to a more modest celebration featuring back to school sales, end of summer events and small family gatherings.

As we celebrate this day honoring American employees, we cannot ignore the changes that have occurred in the American workplace. The days of pension plans and other employer sponsored retirement packages are quickly going the way of the massive Labor Day celebrations. Because of this, it is important that Americans understand the importance of Estate Planning and retirement planning.


The history of the Labor Day holiday has lost its meaning to the American worker, becoming more about the end of summer than the celebration of those who built the country.

Baby Boomers, who thought that retirement would end up being a life of leisure, are

seeing this dreamed dashed by a much different American economy. As many of the industrial giants have moved their factories off-shore and the workplace has shifted to a service oriented economy dominated by small business, the gold watch good-bye accompanied by a great pension is gone.

In the early 1980's, over half of American workers were promised a pension by their workplace and nearly 8 out of 10 could expect that pension to be supplemented by their social security payments. Since then, pensions have quickly disappeared as city, state and union pension plans have gone broke threatening the well-being of those retired or heading for retirement. Company pension plans are gone and being replaced by the 401(k) plans or other retirement/investment strategies for the American worker.

Poor planning and employers who have not helped employees understand this new reality of retirement have forced retired Americans to work well into their 70's and beyond. This, accompanied by rising healthcare costs, low interest rates for fixed income investments, and traditional savings showing little or no return for the investment have caused many to dial back their retirement expectations.

No one will be affected more by this change than the millennials (those born between 1982 and 2000). For this group, it is imperative that they begin planning for retirement today. A 2017 report prepared by the Employee Benefit Research Institute showed that 6 in 10 employees reported feeling confident that they were prepared for retirement but less than 2 in 10 reported that this confidence was built on real information and preparation. And of this group, 4 in 10 stated that they had little or no retirement savings or plans for the future. Many even reported that they have concerns about covering even the most basic life needs upon leaving of the workforce.

WalletHub, a financial web service, did a survey of the United States rating the best states that are friendly to retirees. Using a scale that contained 40 metrics, including rents, taxes, medical costs and other costs-of-living, it may be surprising (or perhaps not), where our local states rank.

Out of 51 states (including the District of Columbia) with 1 being the best and 51 being the worst, Massachusetts came in at 35, Connecticut at number 48 and Rhode Island came in dead last at 51! Within these numbers came the worst cities to live in which included Worcester, MA and Providence, RI. Not good news for retirees.

So, as we celebrate this Labor Day, remember that we are facing an altered landscape today with retirement planning falling on the shoulders of the individual.

But even if you are just a few years away from retirement or decades away, there is still time to implement strategies that can maximize your ability to enjoy a leisurely retirement. Using Estate Planning tools can help make your future bright in this time of new realities.

Attorney Connelly practices in the area of elder law. This area of law involves Medicaid planning and asset protection advice for those individuals entering nursing homes, planning for the possibility of disability through the use of powers of attorney for the both health care and finances, guardianship, estate planning, probate and estate administration, preparation of wills, living trusts and special or supplemental needs trusts. He represents clients primarily in the states of Rhode Island, Connecticut and the Commonwealth of Massachusetts. He was certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation (NELF) in 2008. Attorney Connelly is licensed to practice before the Rhode Island, Massachusetts, Connecticut, and Federal Bars.

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