America needs a retirement czar

America needs a retirement czar
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I have to admit I’ve never spent so much time talking about politics with my friends and spouse as I did in 2017. It was quite a year. As the country takes stock and we begin 2018, I would like to share my thoughts with you about retirement, the area of government I’m most interested in both professionally and personally. The question is what role should the government play in encouraging retirement savings and providing income, health care and long-term care for those who aren’t able to save enough?

Based on my experience and research, retirement ought to have a seat at the table and have someone represent the interests of current and future retirees. Retirement is important to everyone, whether you are 65 or 25. The budget and economy are the reasons why. By 2050, people aged 65 and older will comprise 39 percent of the U.S. population, according to the Census Bureau. The total was about 14 percent in 2012. Social Security and Medicare represent 40 percent of the federal budget and long-term care counts for nearly 28 percent of the Medicaid budget.

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Our fate is in the hands of baby boomers, who control 40 percent of U.S. consumer spending. The housing market is dependent on them, too, with 80 percent owning homes. We want them to keep spending in healthy ways, but we must also recognize that, according to a National Institutes of Health study, 22 percent of all medical care spending occurs in the last year of life, which puts additional pressures on the federal budget.

I have spent my professional life thinking about retirement as a life stage that requires careful and constant attention. I focus on policy, not politics, and policy regarding baby boomers, the second-largest cohort by age in the United States, behind millennials, is wanting. As an actuary by training, I have studied products that can help everyday people address their greatest fear: Will I run out of money during retirement?

Creating government scenarios that promote and reward retirement savings is not simple. It involves, among other things, tax policy, Social Security, health care, long-term care, investment markets and interest rates. Even the best crystal ball will have trouble seeing through the fog. A holistic approach to retirement policy is important because each aspect of the list above is intertwined. Change one factor and it affects all others. But the complexity is not a reason to ignore it.

Let me give you one example of where retirement was not represented in the tax bill just passed. When questioned why corporate tax cuts were permanent and individual cuts were temporary, a spokesperson explained that to make investments, corporations have to plan for the long term. What about the new retiree and spouse, both aged 65, who are looking at a joint lifespan of close to 30 years? It seems to me that they also have to plan for the long term. The new law will also limit the deductibility of interest for home equity loans. How many retirees use the equity in their house to bridge their work to full retirement?

In discussing the possibility of entitlement reform to pay for the deficits, one prominent congressman suggested that the country needs more “babies” to reduce the possible cuts in Social Security reform. In fact, government studies show that net immigration would help stabilize the Social Security fund much faster.

We should not leave the question of retirement to 100 senators and 435 members of the House of Representatives. We need a retirement czar. A secretary for a Department of Retirement would have a big job. This cabinet-level administrator would develop plans to keep Social Security solvent, propose legislation for retirement savings plans that go beyond the 401(k), and strengthen the market for affordable long-term care.

The department would have the time and resources to develop proposals that the politics of tax, rulemaking and budget just don’t permit. The retirement czar would be ambitious, optimistic and able to find a middle ground acceptable to the majority. This person would make decisions that affect millions directly, and the entire nation indirectly. Today, few issues are more important.

Jerome Golden is a national advocate for retirees. He is chief executive officer of Golden Retirement and founder of Go2Income.com.