A National Retirement Savings Program–A Way to Ensure Retirement Security? - Barron's
The news these days is awash with projections of Social Security’s impending demise. Given the constant doom and gloom, it’s understandable that many recent retirees and, more importantly, those looking ahead to retirement develop a sense of despair. After all, the once-prevalent corporate pension programs are steadily disappearing, and savings habits to shore up retirement finances generally aren’t where they should be to ensure comfortable “golden years.” When you roll it all together, it’s a pretty bleak situation.
Whether legislative action to save Social Security for current retirees and future generations happens in time to avoid insolvency is a jump ball at this point, given that it’s been a known problem since the 1990s. Many organizations and think tanks are actively working on solutions that would involve adjustments to the present system, and others are discussing “out of the box” approaches (e.g., the “opting out” alternative mentioned yesterday or the sovereign wealth fund approach highlighted in yesterdays headline post) that would infuse totally new thinking into the problem. Here’s an example of “new thinking,” from Barron’s contributor Zach Buchwald.
Buchwald proposes a “national retirement savings program” with universal “seed funding” and defined tax advantages that would promote more robust personal savings. With market-based returns driving the programs’ growth, the result could be retirement security that is “… less reliant on entitlement and more focused on self-sufficiency and private-sector partnership.” It is an interesting concept, indeed, and one that needs to be added to the conversation.