Retirement Security

Ask not what your country can do for you. Ask what your country has done for you lately.

With apologies to John F. Kennedy, that's what concerned citizens should be doing to get their heads around the debate in Washington about the appropriate size and role of government.

Despite how riveted we are by Washington blood sports, average citizens don't always understand what "government" means. That's not because they're dumb; it's because the nature of government — especially the programs it pays for that affect most Americans — has changed drastically.

On January 12, 2011, policymakers, community leaders, and advocates came together for the the 2011 California Working Families Policy Summit.

This Monday in Los Angeles, a record was set. And I don’t mean (just) the heat: California’s first statewide conference on Harnessing Tax Resources for California Working Families was kicked off at the Sheraton Gateway LAX.

The Great Recession has exposed numerous flaws in our social contract – weaknesses that existed prior to the economic downturn – highlighting the need for changes in our system. This series of policy briefs explores the stresses on our social contract, and the policy changes that must be made to mend it. The six-part series includes:

• Overview: The Great Recession exposes flaws in the American Social Contract.

State budgets are being squeezed by unprecedented amounts for the third year in a row as legislators are forced to close gaps of up to 50 percent of state spending.

As cuts to badly needed services and welfare programs continue, the slice of budgets going to public pensions looms larger. States' widespread underfunding during prosperous periods undermined public pensions even before today's massive budget shortfalls, and now the Great Recession's impact on tax revenues has made pension liabilities appear colossal.

For more and more Americans, the dream of a secure retirement has become increasingly threatened. The Great Recession has taken its toll on a retirement system which has been in place in the United States since WWII. Retirement was conceived as a "three-legged stool," with the three legs being Social Security, pensions and personal savings centered around homeownership.

SACRAMENTO, CA - With the introduction Friday of the Automatic IRA Act of 2010, Congress has joined the effort to address the retirement security crisis spearheaded at the state level in California, by making retirement saving easy and automatic through payroll deduction.

American retirement security, even prior to the Great Recession, was in bad shape. The downturn has only exacerbated previously-existing structural problems, such as an over-reliance on home values and the troubled transition from defined-benefit to defined-contribution retirement plans, as we mentioned in a previous Talking Points article. 

Among the many theories exposed as fallacies by the Great Recession is the idea of the mass upper middle class. During the years of the American bubble economy, progressives and conservatives alike lauded the graduation of most citizens from the working class to a new elite that included the majority of Americans.

We all should've started saving for retirement yesterday. We know this, yet most of us can barely keep our spending in line with our incomes. And when we try to start saving, we are either overwhelmed with options (best case scenario) or with figures that spell inevitable doom.