Retirement savings: The sleeper issue?

Obama needs to handle the chronic diseases plaguing America, the really hard jobs, right now, while he's new in office. The country will be a better place, and will know it, by the time the next election comes around:

1. Re-design Social Security completely.
2. Fix health care (don't nationalize health care; nationalize funding of medical education--set up new med schools and make them free for all qualified students).
3. Simplify the tax code.
4. Close all foreign US military bases (spend the money on the poor in the USA instead: secure housing, soup kitchens, and job training).
5. Bring Israel to heel (phase out all $ aid to it and to Egypt--in sync--and stop all technology transfers; force it to sign nuclear treaties; enforce UN mandates re Palestine; write an airtight law to keep Israel's morphing US-based lobbies registered as foreign agents).

"401(k) plans have taken a big hit in the recession and financial crisis, losing some 18% in 2008" - Isn't this a actually a remarkable performance, not a "big hit" given the stock market was down some 40-50%? Doesn't this mean these plans are working as they are supposed to - people are not taking inordinate risk with their retirement, half or more of the funds are in more conservative investments? The savers on Main Street appear to be smarter than the traders on Wall Street - but we all knew that anyway.

That "savers' credit" idea sounds dumb. Why not remove taxation for interest below some threshold. Taxing interest inhibits saving.

If we have learned nothing else from this economic meltdown it is that private pension plans are a fraud. We need to increase Social Security taxes, remove the ceiling on Social Security taxes, and increase the benefits.

If employees had followed the advice of the so-called experts, they would have done much worse. The standard line was to keep your money in stock index funds. People who kept their money in stable value funds actually ended up with positive returns that were higher than money market funds and partly offset the big losses taken by investors in S&P 500 index funds or international funds.
PW is living in a dream world if he thinks any of the items on his wish list are going to come true. Medical school isn't even free in Canada, the land of high taxes and the single payer health care system.

If employees had followed the advice of the so-called experts, they would have done much worse. The standard line was to keep your money in stock index funds. People who kept their money in stable value funds actually ended up with positive returns that were higher than money market funds and partly offset the big losses taken by investors in S&P 500 index funds or international funds.
PW is living in a dream world if he thinks any of the items on his wish list are going to come true. Medical school isn't even free in Canada, the land of high taxes and the single payer health care system.

If the president was serious about people saving money, he'd make all deposits to savings accounts tax-free until withdrawn. IRA's should be converted to general-purpose "rainy day" funds. There should be no age-related penalties for withdrawal.

Thanks for all the thoughts, all. Just to clarify: The EBRI figures aren't quite a traditional rate-of-return calculation -- it just compares total 401(k) assets at the beginning and end of the year. That means it counts contributions to 401(k) plans during the year as offsetting market declines. So the 18% decline would have been substantially worse, except that many people continued their automatic contributions throughout the year. It also includes people signing up for a 401(k) for the first time sometime during 2008. Not a perfect measure, but certainly an indication of the financial pain people are feeling.

Can you imagine where we'd be if we had put social security in equities?
Absolutely everything down to CEO's would political appointments.
What a mess, never mind having to bail out another failing institution!
http://moneyfinanceandpolitics.blogspot.com/

Your article excluded the name of the fourth founding member of Retirement USA: the National Committee to Preserve Social Security and Medicare, headed by former Congresswoman Barbara Kennelly.

As we get into the solution of the economic crises we need to develope a program of Retirement Security for americamn workers. The folks that gave part of their income with business and industry to prepare for retirement it is now being taken away by courts. Have the Elected offical stop this action now. Many are being hurt!

As we get into the solution of the economic crises we need to develope a program of Retirement Security for americamn workers. The folks that gave part of their income with business and industry to prepare for retirement it is now being taken away by courts. Have the Elected offical stop this action now. Many are being hurt!

If the Feds would just remove all taxes on bank account/CD's we would not need the stupid IRA accounts. Large amounts of money would be saved by individuals. Larger amounts of money would be saved by removing the accounting costs. Do away with stupid income tax. A consumption tax collected at point of sale merchants would even save larger amount of money for everyone. Oh, by the way, we need to impose term limits on U.S. Senators and U.S. Reps. This is so simple, if the little people would just stand up together and make real change we all would no longer owe our souls to the U.S. Treasury.

Why not raise the max contribution to IRA accounts? There are plenty of younger workers looking to buy during this low and bolster their retirement in the long-term.

The idea of not taxing interest earned on any kind of savings plan seems the most logical. To give a tax credit to those that don't pay taxes is just another plan of taking the taxes I paid and giving it away to someone that didn't pay taxes at all.
I'm very concerned about Social Security being means tested (you have too much saved and don't need what they promised from Social Security). Really scary.

It's too bad that Social Security can't go back into its own "untouchable fund", rather than the black hole called General Budget. Oh, well.