Every day, 10,000 Americans turn age 65. Adults over this age now make up more than 15 percent of the U.S. population, according to the Census Bureau – by 2029, this number will surpass 20 percent. Our 2017 Better Government Competition is focused on ensuring a better future for older Americans – and some of the most valuable ideas in this discussion will concern the retirement security implications of this demographic shift.
The fiscal reality today is that most Americans do not have adequate savings to live comfortably in retirement. Equally troubling, many retirement systems are woefully underfunded and unsustainable in their funding practices.
Public pension systems are in particularly rough shape. Research from JPMorgan Chase, published last spring, found that states’ combined unfunded pension and other postemployment benefit (OPEB) liabilities could total $1.5 trillion. Massachusetts is no exception: in 2015, the total unfunded liability for all state employee and teacher retirees rose to $37.9 billion.
The private sector has its share of issues, as well. According to the Pew Trusts, some 30 million private sector employees are not offered a retirement plan through work. Policymakers in a number of states are trying to improve access to different retirement options and nudge private sector workers into saving more. Initiatives to introduce automatic enrollment in retirement savings plans, such as IRAs, are examples. Through this approach, workers are auto-enrolled in a plan but still control how much they contribute and the funds that manage their plan. A number of states, such as California and Connecticut, have forged ahead on this front.
Additionally, all too often, older Americans fall victim to scams or theft from those entrusted with their care. These unfortunate occurrences further drain their financial resources.
As more baby boomers enter retirement, the urgency for new policy approaches grows greater. Retirement security is one of the central topics of our 2017 Better Government Competition for this reason – and we invite anyone with great ideas to submit a proposal to our program to ensure a more secure, prosperous future for all.