September 16, 2012

WE ARE ALL COMPASSIONATE CONSERVATIVES NOW:

The Road to Retirement (NY Times, 9/16/12)

The crux of the problem is that as traditional pensions have disappeared from the private sector, replacement plans have proved woefully inadequate. Fewer than half of the nation's private sector workers have 401(k) plans, and more than a third of households have no retirement coverage during their work lives, according to the Center for Retirement Research at Boston College. [...]

Working longer can help to rebuild savings, and, more important, allow one to delay taking Social Security, which improves the ultimate payout. As a practical matter, however, keeping a job is no sure thing. Workers ages 55 to 64 have been less likely than younger ones to lose their jobs in recent years; their jobless rate has averaged 6.1 percent in the past year, compared with 7.3 percent for workers ages 25 to 54. But when older workers become unemployed, they are much more likely to be out of work for long periods and less likely to find new jobs, while those who do become re-employed usually take a big pay cut.

More saving is clearly needed, along with ways to protect retirement savings from devastating downturns. The question is how. In addition to strengthening and preserving Social Security, the nation needs new forms of retirement coverage, along the lines of the "Automatic Individual Retirement Accounts" that President Obama has proposed in recent budgets, which would require companies that did not offer retirement plans to automatically divert 3 percent of an employee's pay into an I.R.A., unless the employee opted out. A similar plan was recently proposed by Senator Tom Harkin, Democrat of Iowa.

When even the Timesmen favor such privatized SS accounts--for what else are government mandated savings for retirement?--you know you've won.  W, once again, seems to have simply been a man ahead of his time.

Posted by at September 16, 2012 4:54 PM
  

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