A proposes legislative and administrative changes that would make saving for retirement easier for middle- and lower-income households, while at the same time offering practical savings ideas for workers. Aging Gracefully: Ideas to Improve Retirement Security in America was published by the Century Foundation Press and written by William G. Gale, J. Mark Iwry and Peter R. Orszag, Brookings Institution scholars who are principals of the Pew-supported Retirement Security Project, a partnership of Brookings and Georgetown University’s Public Policy Institute.
A new book addresses this situation and proposes legislative and administrative changes that would make saving for retirement easier for middle- and lower-income households, while at the same time offering practical savings ideas for workers. Aging Gracefully: Ideas to Improve Retirement Security in America was published by the Century Foundation Press and written by William G. Gale, J. Mark Iwry and Peter R. Orszag, Brookings Institution scholars who are principals of the Pew-supported Retirement Security Project, a partnership of Brookings and Georgetown University’s Public Policy Institute.
The authors point out that the current retirement savings system does not work for lower-income households, who need it the most. The system offers few incentives to participate and little guidance to navigate through confusing issues such as level of contribution, retention and investment allocation. As Gale often puts it “You don’t have to be a mechanic to drive a car, and you shouldn’t need a Ph.D. in financial economics to navigate the pension system.”
Yet surveys and a Retirement Security Project research experiment have shown that people will save for retirement if it is made easy, and that fact is the basis of the authors’ common- sense recommendations for policy changes.
They argue for: automatic 401(k) features for workers in companies with employer-sponsored plans and automatic IRA enrollment for workers in companies without 401(k) plans, with workers always having the ability to opt out; improved “Saver’s Credit” tax savings for middle- and low-income workers who participate in these savings plans; and reduced implicit taxes on retirement savings imposed through means-tested benefit programs such as food stamps, Medicaid and cash welfare assistance.
For more on retirement security, go to the project’s Web site at www.retirementsecurityproject.org.
Eleni Constantine, director of the Pew Health Group’s financial security portfolio, issued the following statement in support of legislation creating an “automatic IRA,” S. 3760, introduced by Sen. Jeff Bingaman (D-NM) and H.R. 6099, introduced by Rep. Richard Neal (D-MA).
More infoThe Retirement Security Project announced today that J. Mark Iwry, Principal of The Retirement Security Project, Nonresident Senior Fellow at the Brookings Institution, and former Treasury Department official, has been appointed by Treasury Secretary Timothy Geithner as Senior Adviser to the Secretary and Deputy Assistant Treasury Secretary for Retirement and Health Policy, effective April 27, 2009.
The Administration’s budget outline, released today, includes the Automatic IRA proposal developed by the Retirement Security Project.
More infoIn the midst of a campaign with opposing views on most aspects of domestic policy, the presidential candidates have now both endorsed the Automatic IRA.
As traditional pensions fade from the retirement landscape and workers are forced to take a lot more responsibility for their own financial futures, employers are rolling out a variety of features to help workers prepare for retirement.
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