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Kerry H Pechter's avatar

The president has a "shoot, ready, aim" approach to policymaking that he has applied in several realms so far. I expect him to apply this approach to retirement policy, including Social Security reform. This week he expressed admiration for the "Superannuation" system of funding retirement in Australia. That defined contribution system has hard-won successful elements--a mandatory annual 12%-of-pay contribution by employers for employees and the equivalent of US$3 trillion accumulated in the Super funds. But so far no system-wide mechanism for de-cumulating the savings as income-for-life. The Aussie system is like Social Security on the front end (12% mandatory deferral) but more like our 401(k) system on the middle (but w/o accessibility) and back end (a type of RMD). Workplace contributions are partially taxed but distributions after age 65 are tax-free. My point: We could wake up one morning to an Executive Order declaring that an Australia-like system has replaced Social Security... with none of the inevitable disruptions and chaos properly anticipated or addressed. How will we respond to such a fait accompli? Resistance may require bullet-proof Democratic majorities throughout Congress. Right now, a convicted felon determines the future... of the planet.

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