I generally try to avoid politics here in my blog, but I found an article here that is worthy of posting. A recently retired senator posted an article on CNBC talking about our favorite subject, retirement. In this case, she is referring also to her work with a bipartisan group of Senators that produced a series of bills that she claims would, in her words, “boost retirement security for individuals and families.”
Upon reading this story, I decided to look in closer. A group called the Bipartisan Policy Center is supporting the legislation. They claim that the situation is quite serious suggesting that one third of US workers don’t have access to retirement plans, couldn’t cover a $400 expense, and will likely run short of funds in retirement. That may or may not be true, but I have heard enough evidence to suggest it’s likely at least close to the truth.
What I do like is that you have Senators from both sides of the aisle supporting the bills. That tends to suggest that it’s probably good for the vast majority of us. Of course there was bipartisan support of Prohibition, and that didn’t work well for anyone.
Here is the PDF executive summary of the legislation. There are links to the actual House bills in congress
Of the legislation’s main points, only one I think is valuable. The fact is that small businesses may not be able to offer retirement plans, and this legislation appears to make it easier for them to form groups for that purpose. The Small Business Employees Retirement Enhancement Act, S.3219, is for that purpose.
My concerns about one third of Americans not having access to such accounts are mitigated somewhat by the fact that not all jobs need it. I don’t think folks working at McDonalds, and similar work need access to retirement plans. Those are starter jobs, and unless you are management for McDonalds and the like, you should be using such jobs as a stepping stone to other work. For those that can’t, well, they are not paid enough, and it’s likely they will need support from the government regardless. For the record, I did work at McDonalds, and similar jobs, in college and high school. It’s good, honest work, but there is not a lot of money there, so retirement savings is too much to ask of those workers.
In truth, the other bills rather irritate me. I think they will irritate most of my fellow members of this community.
The Retirement Security Flexibility Act, S.3221, makes it easier for employers to auto enroll and auto increase the savings of their workers. This smacks me of condescension. People are not stupid, and they don’t need this kind of forced savings. Workers would be able to opt out. The thing is though, while people are not stupid, often they are not knowledgeable about financial matter. I would prefer to see more financial education in this and the other bills. Our FIRE community is great for that, if nothing else.
The Strengthening Financial Security Through Short-Term Savings Act, S.3218, is a bill that would force people to make emergency savings accounts. Again, I think many know they should, but are not in the financial position to do so, or don’t know how to make the hard choices necessary for so many lower income people to make. My parents were able to make those hard choices; my dad saved money each paycheck for a buffer in case he went on strike as his union contract was always only 3 years long. We were low to middle income during my childhood, and my parents knew better. People know, but illness, divorce, and other issues can make it harder. Forcing such savings is not the answer, but education and other forms of support are.
The Refund to Rainy Day Savings Act, S.3220, is yet another bill along these lines. Sure, I guess, having this option might be helpful, but I don’t see how it would really help.
At the end of this, we have 1 or perhaps 2 bills that I think can be a big help to many people, and the rest are not much use for Americans. If you agree, please do let me and or your congresscritters know that you support them. I would not have a problem if all bills became law, even if I question the value of 3 of them.
Now most importantly, regardless as to whether or not you agree with me, here is the link to find the contact information of your congresscritter. I don’t like politicians very much hence my comical denigration of them all. Nonetheless, I encourage you all to contact your representative to encourage them to support or pull support from any and all of the bills; let alone any other. I am a veteran, and I encourage everyone to engage in the political process, without violence.