Retirement Advisor: A Social Security Supplement (Podcast)

by: SA For FAs
Summary

In an article in The Atlantic, law professors Ganesh Sitaraman and Anne Alstott propose an intriguing fix to America’s retirement crisis.

Retirement savings are inadequate, and Social Security pays an average annual benefit of just about $18,000, which is just half the 60% of pre-retirement income which some financial planners target.

Impressively, their “public option” idea would not cost taxpayers, would not cost employers, and would not displace private-sector competitors.

It entails workers depositing 3 to 5% of their income from every paycheck into a government-sponsored low-fee index fund plan, which would be converted to a life annuity upon retirement.

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In an article in The Atlantic, law professors Ganesh Sitaraman and Anne Alstott propose an intriguing fix to America’s retirement crisis, which sort of nudges workers into saving more without imposing costs on business or government, hence lowering political resistance.

This podcast (5:28) suggests that the two law professors’ idea makes for an excellent start toward solving a retirement problem that is only growing. Once in place, it would be desirable for the government to take steps that would incentivize further saving.