|Retirement Resolutions for Policymakers|
With the New Year right around the corner, hopefully many Americans are breathing a little bit easier. The unemployment rate finally seems to be dropping, and consumers are purchasing more this holiday season than they have in the past two years.
But even should we see strong economic growth in the coming year, challenges remain in terms of Americans' retirement security. Each of the three legs of the retirement stool—a traditional, defined benefit (DB) pension, Social Security, and individual savings—is under strain. Private sector employers have been less interested in offering traditional pensions for decades. Americans’ ability to save is being squeezed by unemployment, stagnant incomes, and rising debt burdens, even as many employers have recently decreased or suspended their 401(k) matches during the Great Recession. Finally, Social Security, the major source of retirement income for most Americans, is already reducing benefits, in the form of a higher retirement age, and faces long-term financial challenges.
Yet there is much that policymakers can do to strengthen traditional pensions in the new year and beyond. Here are NIRS’ 2012 retirement resolutions for policymakers:
Perhaps policymakers will heed these challenges—and options for change—in the new year. In March, NIRS will convene its third annual retirement policy conference, entitled, "Retirement Economics: The Impact of Retirement Plans for Americans and the Economy." The conference aims at answering a central question: In the current economic climate, how does retirement security affect economic growth? What are the economic effects of retirement income on the national, state, and local level, and on capital and financial markets? What solutions exist to broaden retirement security, and what effects will these programs have on the wider economy?
Indeed, there is no shortage of ideas on how to strengthen the retirement security of middle-class Americans. And our opinion research shows that strengthening retirement security could even pay off politically. Some 83% of Americans believe that government should make it easier for employers to offer pensions, and 81% believe that Washington leaders need to give a higher priority to ensuring more Americans can have a secure retirement.
Yet, the more difficult task remains—translating ideas into action in order to raise the bar on Americans’ retirement security. Let’s hope that policymakers take heed of this in the coming year.
Posted on December 30, 2011, by Ilana Boivie, NIRS Director of Programs