Initiative on Financial Security

With the release of the latest Social Security Trustees report on the status of the Social Security trust funds, many are again trying to pit private savings in opposition to Social Security. According to IFS Executive Director Lisa Mensah, that is off base.

At a recent forum sponsored by the National Academy of Social Insurance (NASI), Mensah noted that while too many discussions become bogged down in an ideological debate over Social Security privatization, the real discussion should about how to make retirement more financially secure for more Americans. She argued that the answer is to build on Social Security with private retirement savings and annuities.

Mensah discussed two IFS proposals. The first – America's IRA – would put savings within reach of the majority of working Americans who do not have access to a pension plan at work. The second – Security Plus Annuities– would offer older Americans an additional layer of lifetime, guaranteed income as a complement to Social Security.

Click here to read the congressional testimony on these two proposals by Pamela Perun, IFS Policy Director.

"The big hope is you head into your retirement years with three legs of the stool -- you have your Social Security, you have what you were able to build from your employer, and you have your private savings and the equity in your home. The sad part is that most people are headed in on pretty rickety legs."

So said IFS Executive Director, Lisa Mensah, in the special, Retirement Revolution, which recently aired on PBS. The program focused on the challenges facing the Baby Boom generation as they near retirement.

You can watch the program and access other materials regarding retirement here.

U.S. Personal
Savings Rate

+0.2 percent

Source: Bureau of Economic Analysis;
data for February 2008.

The subprime lending crisis has prompted a reassessment of the issue of homeownership in America. In fact, the catastrophe of the subprime market has even led some to question the wisdom and feasibility of promoting homeownership for less affluent households.

But, homeownership is a cornerstone of the American dream, and home equity is an important path to prosperity as a foundation for acquiring other assets like a college education, a small business, and a secure retirement. Fixing the subprime market is important, but homeownership can still remain within the reach of the less affluent if the focus is shifted toward encouraging a higher savings rate.

In The State of Black America 2008: In the Black Woman's Voice – a recent publication of the National Urban League -- IFS Executive Director Lisa Mensah authors a chapter on putting homeownership back within reach. In it, she outlines the IFS proposal for creating Home Accounts to encourage low- and moderate-income Americans to save for a down payment toward the purchase of a house.

Who We Are
The Initiative on Financial Security at the Aspen Institute is the nation’s leading policy program that uses a business-driven approach to create smart solutions that help Americans save, invest and own.

What We Believe
• America’s asset crisis threatens the strength of our economy and the potential of our people.
• The opportunity to save, invest and own is the foundation of the American dream.
• Creating a savings society will grow the economy and help all Americans succeed.

How We Make a Difference
• Bi-partisan Leadership: We lead a bi-partisan team of top business executives, financial and policy experts, elected officials and community leaders to identify market-based strategies that promote lifelong savings and financial success.

• Pragmatic Approach: We combine real-world business analysis with public policy ideas to strengthen the economy and help families achieve the American dream.

• Smart Solutions: From establishing a savings account for every child at birth to creating public and private matching programs for retirement, we develop new policies and product recommendations to help more Americans finance college, own homes, start businesses and plan for retirement.

Why It Matters
Nearly half of working Americans do not own any type of personal retirement account, and current federal savings policies don’t reach one in three American taxpayers. Helping more Americans invest in assets like homes, education and savings is a smart, safe strategy for long-term economic growth and individual success. Savings helps spark entrepreneurship, increase the GDP, build the middle class and create jobs for our future.

History
The Initiative on Financial Security is a program of the Aspen Institute, which has a 50-year history of visionary thinking and bi-partisan leadership. IFS was founded in 2003 in response to the growing asset crisis in the United States. Led by economic development expert Lisa Mensah, IFS is supported by the Ford Foundation, the Charles Stewart Mott Foundation, the W. K. Kellogg Foundation and the Annie E. Casey Foundation.