These days it seems like Democrats and Republicans seldom agree on anything. So it makes the news when two prominent Senators, one a conservative from the GOP and the other a progressive Democrat, come together to advocate publicly for a top-level federal commission to address what they call a retirement crisis in America.
We discovered this article last week on the website NextAvenue. The article, penned by so-called “unretirement expert” Chris Farrell, spotlights the recent bipartisan legislation put forth by New Jersey Democrat Cory Booker and Indiana Republican Todd Young calling on the government to take urgent action to deal with a retirement system in the U.S. that has been labeled “a huge, huge mess” by analysts. Senators Young and Booker want Congress to form a blue-ribbon commission, dubbed by author Farrell the Retirement Crisis Commission, to propose new laws that would protect a huge swath of America’s workers who presently have zero access to employee sponsored retirement savings plans.
40 Years in the Making
Ironically, in spite of all the changes and economic shifts in recent decades, the last time the government took a long and careful look at private sector retirement rules was during the Gerald Ford administration, when the then-President signed into law the Employee Retirement Income Security Act (ERISA), offering federal protection for private pension plans. (The ERISA law had been triggered in part by the bankruptcy of Studebaker a decade before.)
Senators Young and Booker say we’re due for another government initiative. “My hope is that the commission would deliver to Congress some ideas that are bold and ambitious,” says Senator Young, quoted in the NextAvenue article. “It has been 40 years since Congress has looked at private retirement security in a comprehensive manner. In the intervening decades the economy has been transformed” – with many millions of American workers left behind.
The problem, say experts, is that the disjointed retirement system in the U.S. “has evolved (devolved, really) into an overly complex, byzantine and woefully inadequate safety net for America’s retirees,” Chris Farrell writes. The inadequacy of the American approach to retirement legislation is shown in multiple ways. “About 40 percent of full-time private-sector employees lack access to an employer-sponsored retirement savings plan,” says Farrell, referring mostly to workers at small-to medium-sized businesses with no retirement savings programs. On top of those millions, we have an army of freelancers, independent contractors and gig economy workers who can’t participate in an employer-sponsored retirement plan because they’re not technically employees. (Most part-time workers are in the same boat.) What’s more, just because a worker has a plan doesn’t mean it’s doing its job. “Even people who can sign up a 401(k) retirement plan at work often find it hard to save and manage their portfolio,” says the NextAvenue article, which helps explain the “dismal” figures on how much workers are actually saving in their plans.
What’s the Point?
In light of the poor track record of past blue-ribbon commissions, the obvious question becomes, “What is this Retirement Crisis Commission supposed to do?” Senators Young and Booker have big ideas. First, the make-up of the commission would ensure top-level attention: they want it to include the U.S. Secretaries of Labor, Treasury and Commerce; two presidential appointments; six appointees from the U.S. Senate and six from the U.S. House of Representatives. This group of heavyweights would focus exclusively on private sector plans, not on Social Security. The critical questions are, first, what’s it going to take to help Americans save more for retirement; and, second, how do you cover the huge number of today’s workers with no access to a retirement savings plan?
There are plenty of options to consider, says Senator Young, including some that have been proven in other nations. Australia and some Scandinavian countries, for instance, have enacted mandatory retirement savings programs which are working well. All these various options are well and good, says the NextAvenue article, but even the strongest recommendations may end up stillborn without bipartisan support at the highest levels of government. “Even if Congress approves a retirement commission, the risk is that its report will get shelved,” says the article. “That’s what happened to the retirement system study launched in 1979 by President Carter. Its recommendations — including a mandatory universal private pension — were released in 1981” – just in time for a new administration with a different set of national priorities to kill it.
No Time to Waste
If your idea of retirement planning involves waiting for the government to do the right thing, you may have a long wait. Instead, it’s time to take charge of your retirement by doing some comprehensive and in-depth planning of your own. Here at AgingOptions we call this “LifePlanning,” because it really does take into account the full spectrum of your life in retirement, including your financial preparation, your legal protection, your medical coverage, your housing plans and your family communications. With a LifePlan in place, no matter what the circumstances, you’ll be able to protect your assets in retirement, avoid becoming a burden to those you love, and escape the trap of unwanted, unplanned institutionalization.
There’s an easy, no-risk next step to learn more about the power of LifePlanning. Make a commitment now to join Rajiv Nagaich soon at an upcoming LifePlanning Seminar, where you’ll gain valuable insight into this revolutionary approach to retirement planning. For details and upcoming dates and locations, visit our Live Events page by clicking here: then register online for the seminar of your choice or call us for further information.
Trusting Uncle Sam with your retirement planning is a recipe for disaster. Instead, trust the objective professionals at AgingOptions. We’re ready to be your partner and guide as you build the retirement of your dreams. Age on!
(originally reported at www.nextavenue.org)
Photo Source: flickr (https://creativecommons.org/licenses/by-nc-sa/2.0/)