Retirement

There is a chicken-and-egg problem: business owners cannot afford the high fees of retirement plans, but on the other side of the market, many retirement plan providers are finding it difficult to afford servicing this type of client, and will therefore charge higher fees.

What if you were given the task of designing a retirement system from scratch?

The Financial Security Program spoke with economist Monique Morrissey of the Economic Policy Institute about the state of American retirement and the role of tax incentives.

Numerous studies find that millions of Americans are under-saving for retirement, and psychology and behavioral economics have taught us that there are well-understood problems in decision-making that can cause people to not put enough away for retirement and other needs. The question is how to correct these failures and avoid the considerable hardship that can come with not having enough savings.

It’s hard to imagine that there’s a tax credit that can lower a taxpayer’s bill if he or she saves for retirement in a tax-favored retirement account. This may sound to be too good to be true. But it is true. The IRS has a tax credit that pays people to save for retirement.

If this Obama-era retirement regulation is halted, millions of hard-working Americans could lose out on a great opportunity to save for their future.

The Department of Labor has given a green light to the growing number of states interested in pursuing their own retirement initiatives.

States across the nation, and the federal government, are closely watching Illinois as a promising model to help the 68 million American workers.

It’s now a familiar story: as jobs with good employer-sponsored benefits slowly disappear, policymakers struggle to formulate a coherent response.

Providing Americans the tools to manage the risk of outliving one’s savings in retirement will be a major challenge of the 21st century.