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The US Retirement System Is Stronger Than Critics Portray
By Paul Schott Stevens
May 18, 2020
The May 4 opinion piece “How to Fix the Retirement System” (Washington Post, May 4) paints an inaccurate and misleading picture of the US retirement system. The article misuses data and is based on false assumptions. The retirement system is far stronger than portrayed.
The commentary massively understates the number of American workers participating in an employer-sponsored retirement plan. In fact, the data source the author cites shows that 56 percent of American workers participate. And preparedness goes up with age: contrary to alarmist claims, about 80 percent of near-retiree households accrue benefits in retirement plans or individual retirement accounts (IRAs) by the time they reach retirement.
Today’s private-sector workers already enjoy portable retirement plans, and surveys show they appreciate the ownership and control of retirement assets. And the role of employers—who use these plans to attract and retain workers by tailoring benefits to meet their employees’ needs—is critical to the system’s strengths.
The US retirement system is not perfect, but it’s stronger than the conventional wisdom parroted by this commentary. The key to strengthening the system is building on its success. That’s why ICI has supported measures like the recently enacted SECURE Act. But any reforms must be based on accurate data and a clear understanding of the system we have.
Paul Schott Stevens is president and CEO of ICI.
Permalink: https://www.ici.org/viewpoints/20_view_usretirement
TOPICS: 401(k)IRARetirement Research
Investing Basics: 529 Savings Plans
By Christina Kilroy
May 7, 2020
One thing you can expect when you’re expecting a baby is to pay a lot for diapers—you might pay about $600 by your child’s first birthday. But the cost of diapers is child’s play compared to the costs that could come later when paying for college.
To encourage people to save for these education costs, nearly every state and the District of Columbia offer 529 plans, and most offer special tax treatment for savers participating in those plans.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Investing Basics: Tax Benefits to Encourage Saving
By Christina Kilroy
April 14, 2020
To encourage people to save, federal and state governments offer special tax treatment for savings plans for specific goals, such as retirement and education. By increasing the benefit that savers receive in the short term, the government nudges savers to take a positive action that will provide a benefit in the long term.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder