Retirement

FSP spoke with 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.

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.

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

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.

Because the financial situations and goals of American savers are diverse, they will need a variety of products and services to secure their income.