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This thread is probably not the best retirement issue to address here, on the other hand, things get political quickly and often become laden with posts from the moral evangelicals. I'm going to guess that most of those who end up poor in their old age were, for the most part, poor throughout their lives. That's the bedrock of American poverty stats as it relates to the elderly. The OP asks for opinions, but most are not adequately educated in the social study of the elderly and their personal financial situations, therefore most of the opinions offered will be little more than a regurgitation of people's personal biases.
We already pay into a mandatory savings system, social security, so, beyond that, one's personal ability to save more is a very hard thing to determine. Moralizers will find some joy in their castigating of the elderly poor, but poverty is a lifelong reality for much of the American workforce, and that should dominate the conversation, not the pondering of further mandatory taking by government edict. As a side note, Tony James (the book's author) is a Blackstone Group executive chairman, a billionaire who-- tells working people how to live....
I just finished Rescuing Retirement by Theresa Ghilarducci and Tony James. I realize that some will call the authors socialists, subversives, degenerates, or (worst of all) well-meaning or say they sleep wih pigs, eat worms and bark at the moon. But they note that, since half of workers lack a retirement plan, a mandatory one, Guaranteed Retirement Accounts, need to be created. Note, unlike Oregon's Secure Choice, there is no opt out. Claiming support from the public, academics and even employers, they urge action. Do you support mandatory payroll deduction. Of 3% for retirement?
We have that, it is called social security. You cannot mandate wealth or financial smarts. As it is, most companies offer a 401k package and the federal government gives you a break on taxes for putting aside money in an IRA. If you choose not to take advantage of either one it is your choice.
Years ago, people got SS and pensions, then the 401k was created and companies slowly opted out of pensions. The 401k were created as optional contribution as if everyone had the sense to contribute with each pay. Really? Many people lack discipline, and incomes that didn't keep up with the COL, the young thinking they'll never get old or the "some day" thinkers it didn't work out so well.
Fortunately we did contribute but many didn't and those who didn't, if they don't get a sizable inheritance will be in trouble or working until they die. I don't particularly like gov't involvement because they always seem to screw things up but in this case I lean to support it.
One thing I am learning is many older people don't realize that the younger generation doesn't get pensions, eh, just a side note.
The fact they lack discipline isn't my problem. The problem today, even if pension still existed, is that people don't stay with companies long enough to qualify. 401K's you can take with you by rolling them into IRA's. If someone decides not to sign up for a 401k (sometimes it is matched) maybe stupid but your can't outlaw stupid. The government is not your parent or caretaker.
I do feel for those who are slightly older than me who for years counted on pensions (well before IRA's and 401k's were in existence) and have lost most if not all of it. Me, I would rather have total control over my savings and have had an IRA and 401K since their inception. Failure to do so IMO is stupid but you are allowed to be stupid, just don't take mine away to support your stupidity.
So the key is forcing people to save? Right now, every working person has the ability to save 3% in an investment account of their choosing. They can have it taken directly from their check via direct deposit.
I do feel for those who are slightly older than me who for years counted on pensions (well before IRA's and 401k's were in existence) and have lost most if not all of it.
Add to that the people (like me) who never worked for a company that offered a pension. IRAs didn't come into existence until 1975. By that time I had been working for almost 10 years but never for a company with a pension. From 1975 until 1982 I did establish an IRA but keep in mind that the maximum contribution limits were very low; if I recall correctly, for a person under 50 years of age it was no more than $2000. That's not much more than $20K even with a high interest rate.
In the early 1980s I left the workforce to become a stay at home mom, so no IRA contributions possible there. When I returned to the workforce in the late 1990s I could resume contributing to my IRA but again, the luck of the employment draw meant that I did not work for a company that offered a 401K (well, one of them did but you had to have worked there for two years to be eligible, and I had to leave after a year and a half due to family obligations.) It was tough enough to even get a job after being out of the workforce for 18 years, female without even a bachelors degree, and I sure couldn't afford to be choosy and say "only jobs offering a 401K". Heck, for the first two years back, I was working as a temp for barely above minimum wage with no health insurance and certainly no pension. In the early 2000s I was diagnosed with cancer and that effectively ended my working life for all intents and purposes as well as destroyed my savings. Did a few jobs off the books but nothing that would allow an IRA contribution. So SS plus the remnants of my original IRA is my only income going forward.
I have no idea if my 30something son is contributing to an IRA or if his employer offers a pension. I know he had one at his former job with a large bank, because he had to borrow against it twice: once for their wedding and again for emergency house repairs after Superstorm Sandy. Not sure what its status is now, because his financial decisions are none of my business unless he chooses to tell me. I do suspect, though, that their money goes toward present expenses rather than toward future security. For people like him, a forced savings plan might well be a good idea because I doubt it will be done otherwise. On the other hand my DIL is a teacher which means she will have nothing to worry about when she eventually retires. Teachers have VERY comfortable pensions around here (a product of our obscenely high property taxes, lol.)
The fact they lack discipline isn't my problem. The problem today, even if pension still existed, is that people don't stay with companies long enough to qualify. 401K's you can take with you by rolling them into IRA's. If someone decides not to sign up for a 401k (sometimes it is matched) maybe stupid but your can't outlaw stupid. The government is not your parent or caretaker.
I do feel for those who are slightly older than me who for years counted on pensions (well before IRA's and 401k's were in existence) and have lost most if not all of it. Me, I would rather have total control over my savings and have had an IRA and 401K since their inception. Failure to do so IMO is stupid but you are allowed to be stupid, just don't take mine away to support your stupidity.
I agree but here's my point of forced savings. When I was in college I had an apartment with a roommate, our agreement is we split all bills 50/50. I worked and went to college but she would rather party then go to college. After I graduated and got a good paying job she said to me, "since you make more money than me you should pay more of the bills". Of course my answer was.... NO! I should have asked her if she was willing to help pay my college debt and handed her the monthly bill.
All through the years both DH and I did without, saved, invested so we could retire early and travel. I started a business and rather than overspend we continued saving and investing. Now we are pretty set but with the current mindset of taking from people who earned it and were disciplined to give to those who weren't, people would vote for it too. Because people are not disciplined rather than down the road punish people who are, maybe some form of forced savings is what is needed.
I don't know what the answer is but I do know common sense is not so common especially when people think they'll get bailed out, and parents are also guilty of bailing their kids out too, I've seen it over and over, why would the kids change?
Add to that the people (like me) who never worked for a company that offered a pension. IRAs didn't come into existence until 1975. By that time I had been working for almost 10 years but never for a company with a pension. From 1975 until 1982 I did establish an IRA but keep in mind that the maximum contribution limits were very low; if I recall correctly, for a person under 50 years of age it was no more than $2000. That's not much more than $20K even with a high interest rate.
In the early 1980s I left the workforce to become a stay at home mom, so no IRA contributions possible there. When I returned to the workforce in the late 1990s I could resume contributing to my IRA but again, the luck of the employment draw meant that I did not work for a company that offered a 401K (well, one of them did but you had to have worked there for two years to be eligible, and I had to leave after a year and a half due to family obligations.) It was tough enough to even get a job after being out of the workforce for 18 years, female without even a bachelors degree, and I sure couldn't afford to be choosy and say "only jobs offering a 401K". Heck, for the first two years back, I was working as a temp for barely above minimum wage with no health insurance and certainly no pension. In the early 2000s I was diagnosed with cancer and that effectively ended my working life for all intents and purposes as well as destroyed my savings. Did a few jobs off the books but nothing that would allow an IRA contribution. So SS plus the remnants of my original IRA is my only income going forward.
I have no idea if my 30something son is contributing to an IRA or if his employer offers a pension. I know he had one at his former job with a large bank, because he had to borrow against it twice: once for their wedding and again for emergency house repairs after Superstorm Sandy. Not sure what its status is now, because his financial decisions are none of my business unless he chooses to tell me. I do suspect, though, that their money goes toward present expenses rather than toward future security. For people like him, a forced savings plan might well be a good idea because I doubt it will be done otherwise. On the other hand my DIL is a teacher which means she will have nothing to worry about when she eventually retires. Teachers have VERY comfortable pensions around here (a product of our obscenely high property taxes, lol.)
There's another thread on this somewhere in C-D from within the past few months. As I recall, it boils down to 2 rough groups. Those who are responsible for themselves and expect others to be responsible for there selves. And those who think that those who have more should give to those who have less.
Me, I'm in the former group. I work hard, live well below my means, practice delayed gratification, and don't find anything positive about being punished for trying to ensure that I need not rely on the Gov or any other entity in my later years. Add in that I believe, to the core of my being, that the Government is the most corrupt institution in existence (All levels in the US, probably in the whole world) and I see the proposed 3% take being turned into a 1% return with a 2% "administration fee". Thanks, but no thanks.
Life isn't fair. All life isn't worth protecting/sustaining. Some will have less, some more. Some will DESERVE less, and some will deserve more.
Just a note that it is easier to practice delayed gratification when you are starting from a good position and have relatively good assurances you'll stay there. What might be skipping some actual essentials for some folks would feel like nothing for people with higher income.
Maybe there could be options to "self-insure" by showing the amount you are setting aside in retirement accounts so folks wouldn't get doubly hit saving for themselves and others?
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