Digesting President Trump’s Retirement Plan Announcement - finance.yahoo.com
An estimated fifty million Americans have no formal retirement plan, and the average person receiving retirement benefits collects roughly $24,000 per year[1]. Accordingly, most retired workers rely on Social Security as a significant portion of their retirement income. For many Americans, Social Security is their only source of income. Consequently, there is an urgent need to help workers save more for retirement. Coincident with this, the US savings rate is at a historic low, and many Americans in retirement do not have the savings to help them through unforeseen events they often face.
Recognizing these statistics as part of a “retirement crisis” facing older Americans, Trump in his State of the Union address Tuesday night included this: “I’m announcing that next year, my administration will give these often forgotten American workers — great people, the people that built our country — access to the same type of retirement plan offered to every federal worker. We will match your contribution with up to $1,000 each year, as we ensure that all Americans can profit from a rising stock market.”
While many of the moving parts associated with this announcement have yet to be defined, the addition of a broad timeline (2077) suggests the plan will have priority and could become part of a broader effort to address Social Security’s steadily eroding financial situation. Yahoo!Finance Senior Columnist Kerry Hannon, in a post yesterday on their website, provides additional detail on Trump’s announcment, and offers this quote from Teresa Ghilarducci, a labor economist at the New School: “”This is one of the more substantial administrative interventions in recent decades to fix a substantial failure of our current system — the persistent coverage gap.”
Read Ms. Hannon’s full post here...
[1] https://www.kiplinger.com/retirement/social-security/average-monthly-social-security-check
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