We can’t control what others do and we can’t stop misfortune from striking. But we can control our own actions. Those who are financially prudent will most likely enjoy success, even if events don’t always go their way.
WASHINGTON, D.C., July 23, 2024 – A new research brief from the National Institute on Retirement Security (NIRS) finds Americans want action now on a long-term funding solution for Social Security. When asked about the timing for Congress to act on addressing Social Security’s funding shortfall, Americans don’t want leaders to kick the can down the road. Eighty-seven percent say Congress should act now rather than waiting another ten years to find a solution. This sentiment holds strong across gender, age, and party affiliation.
Wake up!
This nationwide survey also finds that 87 percent of Americans agree that Social Security should remain a priority for the nation no matter the state of budget deficits, and this support holds strong across party affiliation. Ninety percent of Democrats, 86 percent of Republicans and 88 percent of Independents support keeping Social Security a priority. Americans also support increasing employer and employee contributions to ensure the long-term sustainability of Social Security.
Read the issue brief. This issue brief is a supplement to a recent NIRS report, Retirement Insecurity 2024: Americans’ Views of Retirement. Read the report.
Trump / Biden, Trump / Harris, neither are serious about entitlements. Kick the can down the road. As David McIntosh wrote in the Wall Street Journal a year and a half ago, back on April 13, 2023, “The Biden-Trump Plan to Cut Social Security: Doing nothing won’t protect beneficiaries. It’ll subject them to automatic 23% cuts in 10 years”. He noted: “… Joe Biden stated in March: “I guarantee you I will protect Social Security and Medicare without any change. Guaranteed,” Mr. Trump has said: “I will do everything within my power not to touch Social Security, to leave it the way it is.” … The Biden-Trump position may sound like a pledge to protect Social Security, but it isn’t. The law “without any change” requires a huge benefit cut in 10 years. … Meanwhile, the Biden-Trump strategy has been to play “beat the clock,” leaving their successors to deal with the crisis. … Candidates with a record of entitlement reform … would do well to point out that doing nothing is the worst Social Security cut.”
And NIRS isn’t serious either! Ask yourself, what does the report say American workers are willing to give up to fund a pension, to properly fund Social Security and Medicare, to fund long term care, etc.? What additional savings are they willing to contribute? And, if Americans want it so bad, why don’t they take that action today?
Every American wage earner is eligible for a more than adequate, perfectly acceptable, tax-preferred retirement plan, that they can fund with contributions throughout their working years, every year since 1982. Anyone who is as old as I am could have made 43 contributions, through 2024, and, combined with Social Security, had those contributions earned 5% – 6%, the income from both sources would be enough to replace 90+% of pay. So, that is also true for workers age 21 entering the workforce today.
However, according to the IRS, only 12% of eligible Americans households contribute to Individual Retirement Accounts each year.
Who is to blame where an older American reaches retirement age without adequate savings to fund a pension? Look in the mirror. Remember that accumulated savings can be easily converted to a retirement income – various options, SPIA, DIA, MYGA, deferred Social Security, etc. Just ask any life insurance agent.
People like NIRS are like people who supported Health Reform that increased taxes/increased budget deficits where the costs were added on to people who already took a reduction in wages to work for an employer who offered health coverage in order to subsidize coverage for those in the public exchange, or to expand Medicaid.
You can hear NIRS clearly and loudly – “Don’t tax you, don’t tax me, tax that guy behind the tree” or “the best tax is the one I owe and YOU pay!”
And the NIRS report is very, very, very self serving. They report most every American wants a pension. OK, how bad do they want it? When people say every American wants a pension benefit, where is that on their list of priorities? Ask them what they would forego or where they would reallocate from – direct a portion of their salary/wages, increase employee contributions for health coverage and use that to fund the pension, etc.
The answer is in Figure 20: “Most Americans increasingly agree that employers should contribute more to workers’ retirement plans”, and in Figure 21: “The vast majority of Americans agree that they need income increases in retirement (after work ends) to contend with inflation.” and in Figure 28: The vast majority of Americans say government should make it easier for employers to offer pensions.”
But every employer COULD offer a pension today. What they are saying is “someone else” – “someone else” should be responsible, “someone else” should pay, and after I retire, “someone else” should continue to pay.
NIRS/Greenwald didn’t ask the right question. They shouldn’t ask what people want. They should have asked what people are willing to pay for or willing to forego in order to have a pension.
NIRS/Greenwald should have asked:
Would you voluntarily join your employer’s pension plan if it had these provisions:
The good: 50% pay replacement of pre-retirement income payable at your Social Security Full Retirement Age, with an automatic post-retirement increases based on the Consumer Price Index,
The bad: The benefit requires you complete 40 years of service with one employer, and
The ugly: Workers must contribute 10+% of pay in each of the 40 years
No. Given a choice, they wouldn’t join, in part because the median tenure of American workers has been less than 5 years for the past 7 decades (according to the Bureau of Labor Statistics).
The fact is, when you ask Americans, most will tell you that they prefer to spend their entire paycheck every payday, AND, a considerable percentage of that paycheck is already spoken for as it goes to pay interest on debts incurred in the past when they spent more than they earned.
In one paragraph in the NIRS report, they both lie and tell the brutal truth:
“… As many private sector employers replaced pensions with 401(k) accounts, risk and responsibility largely was shifted to workers. Under a 401(k) system and unlike a pension plan, workers bear the responsibility for determining how much to save, how to invest the assets, and how to spend down their savings at the right rate such that a retiree doesn’t outlive their savings. …”
But, employers DID NOT replace pensions with 401(k) accounts. Pensions started to decline the moment Congress passed ERISA, 50 years ago in 1974, where they required plans vest workers prior to separation and fund the benefits (well, fund the single employer plans, where multiemployer union plans required a $80+ Billion bailout by taxpayers just a couple years ago). That’s the lie. 401k plans didn’t come on the scene until 1982, and the first 401k plans were defined contribution plans that were already in place, where employers simply added 401k features.
In fact, the embrace of 401k plans is the one reason why the number of retirement plans increased so significantly, from about 200,000 in 1975 to nearly 700,000 today. The emergence of the 401k is the only reason many retirees and workers near retirement will avoid a retirement of living in poverty.
And the truth? Yes, if you want a pension, you have to be responsible yourself.
Amazing requirement, you have to be responsible for the decisions you make, you have to decide your own priorities. Is that a mistake, or is that the American way – giving Americans freedom, control?
So, if you want a traditional pension today, a guaranteed monthly income in retirement, you only have three basic choices:
Accept less wages or other benefits to join (and remain at) an employer who offers a lucrative pension plan,
Join a public employer and let the taxpayers fund your pension, or
Be responsible and save more to fund your own pension.
why would anyone believe this–wasn’t too long along this site told us folks were not too smart about economics and investing–maybe we needed to improve our financial education system.
folks are all for something if they think they will avoid it–so maybe a plan that excludes a vast amount of folks would see some daylight
I say only a crisis will bring change and we are told we are good for maybe 8 more years.
I noticed Greenwald Research got 1280 responses off an online survey to come up with all the numbers. I guess that represents all Americans when the report was written. Anyway, we’re near a new administration and that’s when the deed gets done or maybe not.
The solution that Harris or Trump would favor is light years apart and disagreeable to many. That’s just based on snippets of their positions given in news reports. They may be more flexible than was being said however.
QUINNSCOMMENTARY 
Sorry about the length of this post.
Trump / Biden, Trump / Harris, neither are serious about entitlements. Kick the can down the road. As David McIntosh wrote in the Wall Street Journal a year and a half ago, back on April 13, 2023, “The Biden-Trump Plan to Cut Social Security: Doing nothing won’t protect beneficiaries. It’ll subject them to automatic 23% cuts in 10 years”. He noted: “… Joe Biden stated in March: “I guarantee you I will protect Social Security and Medicare without any change. Guaranteed,” Mr. Trump has said: “I will do everything within my power not to touch Social Security, to leave it the way it is.” … The Biden-Trump position may sound like a pledge to protect Social Security, but it isn’t. The law “without any change” requires a huge benefit cut in 10 years. … Meanwhile, the Biden-Trump strategy has been to play “beat the clock,” leaving their successors to deal with the crisis. … Candidates with a record of entitlement reform … would do well to point out that doing nothing is the worst Social Security cut.”
And NIRS isn’t serious either! Ask yourself, what does the report say American workers are willing to give up to fund a pension, to properly fund Social Security and Medicare, to fund long term care, etc.? What additional savings are they willing to contribute? And, if Americans want it so bad, why don’t they take that action today?
Every American wage earner is eligible for a more than adequate, perfectly acceptable, tax-preferred retirement plan, that they can fund with contributions throughout their working years, every year since 1982. Anyone who is as old as I am could have made 43 contributions, through 2024, and, combined with Social Security, had those contributions earned 5% – 6%, the income from both sources would be enough to replace 90+% of pay. So, that is also true for workers age 21 entering the workforce today.
However, according to the IRS, only 12% of eligible Americans households contribute to Individual Retirement Accounts each year.
Who is to blame where an older American reaches retirement age without adequate savings to fund a pension? Look in the mirror. Remember that accumulated savings can be easily converted to a retirement income – various options, SPIA, DIA, MYGA, deferred Social Security, etc. Just ask any life insurance agent.
People like NIRS are like people who supported Health Reform that increased taxes/increased budget deficits where the costs were added on to people who already took a reduction in wages to work for an employer who offered health coverage in order to subsidize coverage for those in the public exchange, or to expand Medicaid.
You can hear NIRS clearly and loudly – “Don’t tax you, don’t tax me, tax that guy behind the tree” or “the best tax is the one I owe and YOU pay!”
And the NIRS report is very, very, very self serving. They report most every American wants a pension. OK, how bad do they want it? When people say every American wants a pension benefit, where is that on their list of priorities? Ask them what they would forego or where they would reallocate from – direct a portion of their salary/wages, increase employee contributions for health coverage and use that to fund the pension, etc.
The answer is in Figure 20: “Most Americans increasingly agree that employers should contribute more to workers’ retirement plans”, and in Figure 21: “The vast majority of Americans agree that they need income increases in retirement (after work ends) to contend with inflation.” and in Figure 28: The vast majority of Americans say government should make it easier for employers to offer pensions.”
But every employer COULD offer a pension today. What they are saying is “someone else” – “someone else” should be responsible, “someone else” should pay, and after I retire, “someone else” should continue to pay.
NIRS/Greenwald didn’t ask the right question. They shouldn’t ask what people want. They should have asked what people are willing to pay for or willing to forego in order to have a pension.
NIRS/Greenwald should have asked:
Would you voluntarily join your employer’s pension plan if it had these provisions:
No. Given a choice, they wouldn’t join, in part because the median tenure of American workers has been less than 5 years for the past 7 decades (according to the Bureau of Labor Statistics).
The fact is, when you ask Americans, most will tell you that they prefer to spend their entire paycheck every payday, AND, a considerable percentage of that paycheck is already spoken for as it goes to pay interest on debts incurred in the past when they spent more than they earned.
In one paragraph in the NIRS report, they both lie and tell the brutal truth:
“… As many private sector employers replaced pensions with 401(k) accounts, risk and responsibility largely was shifted to workers. Under a 401(k) system and unlike a pension plan, workers bear the responsibility for determining how much to save, how to invest the assets, and how to spend down their savings at the right rate such that a retiree doesn’t outlive their savings. …”
But, employers DID NOT replace pensions with 401(k) accounts. Pensions started to decline the moment Congress passed ERISA, 50 years ago in 1974, where they required plans vest workers prior to separation and fund the benefits (well, fund the single employer plans, where multiemployer union plans required a $80+ Billion bailout by taxpayers just a couple years ago). That’s the lie. 401k plans didn’t come on the scene until 1982, and the first 401k plans were defined contribution plans that were already in place, where employers simply added 401k features.
In fact, the embrace of 401k plans is the one reason why the number of retirement plans increased so significantly, from about 200,000 in 1975 to nearly 700,000 today. The emergence of the 401k is the only reason many retirees and workers near retirement will avoid a retirement of living in poverty.
And the truth? Yes, if you want a pension, you have to be responsible yourself.
Amazing requirement, you have to be responsible for the decisions you make, you have to decide your own priorities. Is that a mistake, or is that the American way – giving Americans freedom, control?
So, if you want a traditional pension today, a guaranteed monthly income in retirement, you only have three basic choices:
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why would anyone believe this–wasn’t too long along this site told us folks were not too smart about economics and investing–maybe we needed to improve our financial education system.
folks are all for something if they think they will avoid it–so maybe a plan that excludes a vast amount of folks would see some daylight
I say only a crisis will bring change and we are told we are good for maybe 8 more years.
LikeLike
I’ll believe a solution from Congress when I see it !
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I noticed Greenwald Research got 1280 responses off an online survey to come up with all the numbers. I guess that represents all Americans when the report was written. Anyway, we’re near a new administration and that’s when the deed gets done or maybe not.
The solution that Harris or Trump would favor is light years apart and disagreeable to many. That’s just based on snippets of their positions given in news reports. They may be more flexible than was being said however.
LikeLike