Given that millions of Americans are facing a very uncertain and risky retirement (53% of working households are at risk of financial insecurity in retirement, up from 30% in 1989), it’s troubling to see national leaders seemingly bent on making the problem worse.
Leading Republicans have long backed cuts to Social Security, including raising the retirement age. Now President Obama has indicated he would support the Chained CPI as part of a larger budget deal – a backdoor benefit cut, as it would reduce Social Security’s cost-of-living adjustments.
A recent survey by the National Institute on Retirement Security (NIRS) found that 85% of Americans are worried about their prospects for retirement. Millennials are especially concerned about their prospects, with 95% agreeing the nation’s retirement system needs repair.
NIRS also found an overwhelming number of Americans want to ensure all Americans have access to a pension plan, and to protect Social Security benefits from cuts. Other recent polls have also shown strong support for Social Security, which is the nation’s only guaranteed retirement system. The high level of support for a public pension system isn’t all that surprising, given the current level of worry about retirement.
NIRS describes its proposed pension system as “new pension plan that is available to all Americans, is portable from job to job, and provides a monthly check throughout retirement for those who contribute.” It’s very similar to a proposal now in the U.S. Senate called Universal, Secure, and Adaptable (“USA”) Retirement Funds, supported by Iowa Senator Tom Harkin.
Home equity has evaporated in the wake of the housing bubble, and the market crash decimated 401(k)-style retirement accounts. Protecting and improving Social Security is a critical step for protecting people from the worst, but a universal American pension system would represent real and important progress toward a more dignified and secure future.