FYI:
Regards,
Ted
September 22, 2016
Dear WEALTHTRACK Subscriber,
There is a retirement crisis in this country that is escalating as an estimated 10,000 thousand baby boomers a day turn 65. Two thirds, or 40 million, of the approximately 76 million boomers are already 65 or older… and Social Security, which nearly two-thirds of boomers cite as their major source of retirement income, is headed for insolvency.
Unless changes are made to Social Security in terms of increased funding and tighter eligibility, the program is projected to spend more than it earns by the end of this decade and will be completely depleted by 2034.
It’s not just baby boomers who are in trouble. With the demise of traditional pension plans and increased longevity younger Americans are facing enormous savings and retirement plan shortfalls as well unless their savings and investing habits change. It is past time to address the crisis.
2016 is the tenth anniversary of the Pension Protection Act, or PPA, which was largely designed to shore up financially troubled defined benefit plans, and their insurer, but the legislation also vastly improved the health of defined-contribution plans including 401(k)s, now the dominant individual retirement savings vehicle for those Americans who are offered such plans at work, mostly at large companies.
There is a huge gap in access for employees of small businesses, long the primary drivers of job creation and employment. Nearly 40% of working households do not have access to employer based plans. And the vast majority of part-time and contract workers are left out entirely.
Momentum is building from the private and public sector to change this and offer much greater access to retirement plans that work for employers and employees alike. This week’s guests are in the forefront of these efforts.
We’ll be joined by Brigitte Madrian, Professor of Public Policy and Corporate Management at the Harvard Kennedy School of Government. Since 2014 she has also been one of the 19 members of the Commission on Retirement Security and Personal Savings set up by the Bipartisan Policy Center. The commission of business, political and policy leaders recently issued its recommendations to reform Social Security, broaden access to workplace retirement plans and promote savings.
We’ll also hear from Fredrik Axsater, Global Head Of Defined Contribution at State Street Global Advisors which oversees more than $2 trillion in both actively managed and passive assets globally. About $300 billion of that is in global defined contribution plans. SSGA is the investment management arm of State Street Corporation. Axsater, who joined SSGA in 2011, has devoted his professional career to making retirement work for employers and employees around the world.
SSGA’s CEO Ron O’Hanley recently wrote an open letter to Congress calling for mandated workplace retirement coverage retirement coverage for all private sector workers. I asked both guests why they believe focusing on the workplace is key to solving the retirement crisis and why they are both optimistic that expanding 401k access nationally will happen.
If you miss the show on air this week, you can always catch it on our website. We also have an EXTRA interview with both Madrian and Axsater, available exclusively online. As always, we welcome your feedback on Facebook, Twitter or via the Contact Us link on our website. We read all of your comments.
Thank you for watching. Have a great weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo
