Retirement security “more fragile than ever” and “Americans are not saving enough” for old age
Americans’ retirement security is unstable, and legislation focused on pensions, social security, and other savings or health issues must be a priority for government officials, a group of 31 organizations wrote in a recent report. public letter to President Biden.
Businesses, economic think tanks and other organizations signed a letter urging the president to create an interagency task force from some of the key ministries, including the Ministry of Labor, the Treasury, the Securities and Exchange Commission and the White House Gender Policy Council. . The letter was signed by ADP, Edelman Financial Engines, Employee Benefit Research Institute and Prudential, to name a few.
âThe proverbial three-legged retirement stool is more fragile than ever. Social security and health insurance face funding gaps, while pension plans have largely disappeared for young workers, âthe letter, posted on the Bipartisan Policy Center website, declared. âAt the same time, increasing life expectancy, skyrocketing health and long-term care costs, and rocketing interest rates have created new retirement security risks. .
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The government must prioritize retirement security, especially since it is so much more than the money Americans spend in their old age, said Jason Fichtner, vice president and chief economist of Bipartisan Policy Center. “We need to think more holistically, not just about retirement, but about the milestones and the episodic shocks that occur.” This includes crippling student debt, money management, family and household responsibilities, use of credit, emergency savings for the unexpected and everything in between leading up to retirement, he said. he noted.
More attention must also be paid to social security, which faces an insolvency problem in the next fifteen years. âWhen you look at it objectively, the rational conclusion is that the Social Security program needs to do more to replace the missing pension,â said William Arnone, executive director of the National Academy of Social Insurance. More analysis and conversation needs to be spent on figuring out how to pay for the program and any extensions, he said.
Near retirees could use more guidance in retirement, which an interagency working group could provide. âModern retirement is forcing baby boomers to make decisions ranging from social security and health insurance to retirement income and more,â said Rhian Horgan, Founder and CEO of Application of retirement planning Silvur. âContinuing a siled approach to helping retirees make these decisions further complicates the process. ”
A partnership between the agencies could help in several areas, including caring for parents or aging children, as well as the link between health and wealth, Horgan said.
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These organizations are, among others, partners in the âFinance Our Futureâ initiative, which pursues three key objectives: to make it easier for Americans to save, to help them turn their savings into retirement income, and to support Social Security needs for the future. current and future needs. retirees.
Americans are not saving enough for their future and may not be able to maintain their standard of living into old age, the letter said. The current pandemic is making the problem worse. But an executive order establishing this task force and requiring a biannual report for the president and the American public, as well as a biannual summit, could help.
“With millions of Americans at risk of missing out on retirement, time is running out,” the letter said. âA majority of Americans fear that they will run out of money in retirement, making it the most common financial concern in the country. Public policies can address many of the pressing challenges facing retirement savings and working income.