NY Times: Strengthen and Expand Retirement Savings

This weekend the NY Times ran an editorial piece, “The Road to Retirement,” that makes a series of arguments that sound familiar:

Americans lack retirement savings. They also lack other forms of wealth to stopgap their retirement needs. Working longer isn’r realistic for enough people. Somebody should do something, why won’t the presidential candidates talk about this?

As Ed Kilgore Paul Glastris points out (and thanks for the shout out, Ed Paul), that sounds familiar because it’s just about the same thing that Phil Longman wrote in the July/August special issue of the Washington Monthly. As you might recall, the whole issue was dedicated to exploring asset building, centering on the idea that jobs are not enough to support a growing and robust middle class, and that our presidential contenders aren’t talking enough about how they would support families developing enough in the way of savings to be truly secure financially.

More needs to be done. The Times gets this, now others need to get on board as well. Ed Paul sums this up really nicely, so I’ll let him do it:

Like I said, we are delighted to see the New York Times sounding the alarm about this problem. But while the one possible solution they point to, the Obama administration’s proposed universal opt-out IRA, is a perfectly good one, it doesn’t remotely match the scale of the problem, as the editorial itself admits. So our hope is that the Times will be devoting more ink to other possible solutions to the wealth and savings crisis. They’ll find plenty of such ideas in our July/August issue—including mandatory matched savings plans for every young American; new regulations that allow average families, and not just big corporations, to make money on clean energy investments; and tax reform that takes some of the half trillion dollars in federal tax breaks for savings and investment, which now mostly go to the upper 20 percent who don’t need help saving, and redirects it to the bottom 80 percent who do. With any luck, some of those ideas will make their way into presidential contest.

All that I would add is that families have savings needs beyond retirement. Beyond isn’t really the right word, it’s before. If we don’t take steps to address those needs, then any effort to expand retirement savings is going to be less successful than it otherwise might have been, when people don’t know how they’re going to get through the month they tend to not plan for a couple of decades down the road.

Update: Turns out Paul Glastris wrote the piece that I quoted above, my apologies to Paul and Ed for the confusion.