[mikester]

I think the best bet is to allow people to put more into IRAs and similar accounts (401k, 403b...etc). If you give them more of an incentive to save money for retirement (which lowers their taxable income) I think it'll have a better effect than lowering overall income taxes (which I think will just increase spending which IS good for the economy but not what you're after here).

Pensions are scary to me. Private companies can make very generous pension offers to people to get them to work for a company for 20 years but when that person retires and the fate of the company goes south.... The federal pension agency that guarantees (insures) the pensions has it's own guidlines. Those guidlines treat employees that earn under 50k the best but over that and under 65 (say you retired at 61) you'll get less than you earned.

State run pensions can be just as scary, during the boom of the early internet Orange County increased it's benefits package dramatically for retirees which is great on the surface but in the long run it has proved irresponsible. Now, our economic shrinkage and the budget problems in CA overall the OC can't afford to keep up the benefits and it now looking at a cut back.

Investments are scary too for the more obvious market fluctuations but at least then YOU are responsible for the decisions made. I'm not sure that's good or bad.

Being in the govt sector myself I have a pension plan (if I stay with it) but I do plan on contributing as much as I can to my existing retirement via IRA or 403b.