A recent report by the Bipartisan Policy Center’s Commission on Retirement Security and Personal Savings promotes recommendations to address challenges in an era of incomplete access to retirement plans, generally stagnant income growth and a Social Security program with unsustainable financing.
The commission notes that just over half of private-sector workers do not participate in retirement savings plans, with 34 percent having no access and 17 percent having access but not contributing. Meanwhile, Social Security, the main source of retirement income for most Americans, is projected to face 23 percent benefit cuts in 2034 as revenues aren’t enough to pay for promised benefits.
The commission offered a comprehensive solution to Social Security’s long-term challenge through a roughly 50/50 split between revenue increases and spending reductions. The commission proposed indexing the retirement age to reflect increasing longevity, using a more accurate measure of inflation for cost-of-living adjustments, reducing benefits for higher-income beneficiaries, and raising payroll taxes.
Other recommendations from the commission would expand access to workplace retirement savings plans, reform retirement-related tax expenditures, and improve financial literacy. These recommendations complemented the Social Security proposals and would increase retirement income across the economic spectrum.
The commission was co-chaired by former Senate Budget Chairman Kent Conrad and James Lockhart, former principal deputy commissioner of the Social Security Administration, and featured an ideologically diverse group of former government officials, policy experts, labor and business leaders, and Social Security’s public trustees.
External links:
Securing Our Financial Future: Report of the Commission on Retirement Security and Personal Savings
Social Security Chief Actuary’s Analysis of BPC Recommendations
Workers Lack Access to Employer Retirement Plans (Concord)
Time to Heed Warnings From Medicare and Social Security Trustees (Concord)
