We don’t normally praise government programs and financial systems when we sit down to Thanksgiving dinner, but I thought it would be good to list the things about retirement security that deserve our praise, along with a side dish of what we can wish for in improvements.
In that spirit, here is a list of what we should all be thankful for this season (in addition to the bounty of our loving families).
We can give thanks for:
- A strong Social Security system that with some modest reform can protect not only current but also future retirees for generations.
- A pension system created by U.S. companies that benefits many retirees, along with the Pension Benefit Guaranty Corp. that protects the retirement incomes of more than 40 million Americans.
- A very strong life insurance industry that has survived many years with well-designed regulatory protections. Many of the highest-rated companies have been in existence for 100 years or more.
- Strong consumer protection for buyers of financial products. Our system could work more efficiently and fairly, but we have a structure to build on.
- A fair tax system for retirement security that encourages us to save while enabling the government to recover some of these deferred taxes over time.
Side dishes of wishes
Consumers have a sophisticated network of advisors available to assist them in making retirement decisions. But generally the financial system and underlying regulatory framework is made up of silos and the advisors in each silo are unfamiliar with products in the other silos.
For instance, if your advisor specializes in investing, they might not offer annuities or know how to guide you. Or an advisor with an insurance background might have no idea how a reverse mortgage works. Until we can break down the silos (and we’re trying) consumers must educate themselves and be able to make their own decisions.
Not enough people have easy access to information that will help them take advantage of retirement savings programs like a 401(k), an IRA or an income annuity. Educating consumers about finance and retirement can be done through existing structures at low cost.
A little more empathy for the consumer on the part of advisors or these walled-off product providers has the potential to improve retirement security for millions. That would be just the right approach for the holiday season, and for all year long.
My Thanksgiving wishes include the hope that you are able to spend the holiday with family and friends, safe and without worries.
Jerry will be spending Thanksgiving with his family and will take a break from his regular Friday posting for this week only.