Retirement Security

 I've recently been thinking about the similarities between our national epidemics of obesity and financial illiteracy. Both are socio-cultural phenomena created through generations of misinformation, misunderstanding and perverse incentives.  Factors like (but not limited to) easy credit and encouraged consumerism without proper consumer disclosure and easy access to abundant, cheap astonishingly unhealthy foods has created a culture of overindulgence on so many levels. Both problems tend to fall disproportionately on poor, low and even some moderate-income households, which lack easy access to alternative options (like banks red-lining disadvantaged neighborhoods; public school cafeterias serving french fries most everyday yet not offering physical education classes). And both are believed to have huge social and economic costs that are now reaching epic proportions.  If similar forces are causing and/or driving these problems, then shouldn't efforts to tackle both childhood obesity and financial illiteracy also be similar?  Only recently has this become apparent to those fighting the battle of such rhetorical bulges.

The Los Angeles Times published an editorial today in support of Assemblyman Kevin de Leon's plan to provide workers who are not eligibile to participate in an employer sponsored plan access to a safe retirement savings product. 

This is obviously a major boost to New America's efforts to create a voluntary, portable, low-cost, high quality retirement account structure for all workers in California.  See this previous post for more.

Stay tuned for updates as this important (and ambitious) proposal travels through the state legislature en route (we hope!) to the Governor's desk.

A bill recently introduced in Sacramento, and supported by Governor Schwarzenegger, has the potential to cover almost every California worker. No longer will those unlucky enough to work for an employer who doesn't provide coverage be left vulnerable. No longer will those who seek to buy coverage on their own be priced out of the market. And best of all, it will cost virtually nothing. Interested? Good. But we aren't talking healthcare-we're talking retirement.

Today, more than one-third of today's seniors subsist almost entirely on income from social security - an average payment of just over $1,000. For those workers (most of us) who aren't fortunate enough to be covered by a defined benefit, employer-sponsored pension plan, i.e. checks for life, the only way to prevent retirement of destitution is to start saving now. But unfortunately, many workers lack access to the products and services necessary to begin planning for retirement