American reforms aimed at the up and coming retirement saver

Before we beat ourselves up about our pension saving system, take a look at what is happening on the other side of the pond. The American system works for those who work long and hard and who have healthcare, it does not work for those in low paid jobs, who are unemployed and who have neither healthcare or the savings to meet their bills.

Here is a comment I picked out , after hearing the self-congratulations of those on the Yahoo Finance call embedded above

I can barely afford to eat and now you’re going to force me to use my money in your moral high ground virtual signal way. Leave me alone.

That sounds like the voice of a seriously pissed off citizen coming off a bad Christmas. It’s a voice you don’t get to hear too often as most of us don’t use Yahoo Finance to get our financial woes off our chest and very few people with no money are as articulate as “Rikdoctor”. Whether the account is authentic or not, the point is well made.

The “sink or swing” culture of the USA has been challenged by Obamacare and now by Secure and Secure 2.0 but the USA is still a longer way from providing universal social security than either the UK or our European peers. Incentives to save in Secure 2.0, the new package of retirement policies introduced this week are still focussing on the upwardly mobile not the down and out.

But it’s great to see Americans like Angela Antonelli getting behind the opportunities that Secure 2.0 is opening up. You can read more about them here.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to American reforms aimed at the up and coming retirement saver

  1. BenefitJack says:

    In the comment you posted, the writer ignors the fact that the cost of health care coverage in America for retirees is heavily subsidized. The cost of employer-sponsored health care coverage for workers (in terms of the worker’s contributions towards the cost of premiums), often has less of an impact on take home pay than the cost of Medicare Hospitalization Insurance funding (FICA-Med) for others who have already retired.

    And, Medicare payroll taxes (FICA-Med) are projected to be insufficient to fully fund Medicare Hospital Insurance starting in 2026. So, the above situation is likely to worsen.

    Just as important, the Hospital Insurance trust fund (funded with FICA-Med payroll taxes) doesn’t fund the other major components of Medicare – Part B (non-Hospital services, equipment, etc.) and Part D (prescription drugs). Approximately 75% of the cost of non-Hospital medical services and prescription drugs is paid with general revenues – the majority of which are funded by income taxes. And, in America, in 2020 and 2021, less than 50% of American households paid income taxes. The Tax Policy Center estimates that 61% of Americans paid no federal income taxes in 2020 and 57% of American households paid no federal income taxes in 2021.

    Let me put it to you this way. I have been working since 1968, and every year since the mid 1970’s, almost 50 years, I have paid more for other people’s Medicare coverage (in terms of just the payroll taxes, FICA-Med, and its impact on my take home pay) than I have contributed from my own take home pay for my own medical coverage.

    And, according to most economists, the majority of the cost of my medical coverage is funded by an indirect reduction in the wages my employer pays.

    And, in America, we are almost at the point where there are as many people who receive taxpayer funded health coverage as for those who are covered under an employer-sponsored plan.

    My suggestion to the person whose comment you listed is simply:
    First, most American employers with 50+ workers offer health coverage, seems like most employers in America are still hiring as we head into a recession, and
    Second, if you work for an employer that does not offer coverage, you should consider options in the public exchanges.

    In 2023, for example, in my location, a single individual age 55, earning up to $101,000 can receive a taxpayer subsidy towards the cost of public exchange health coverage. No one who purchased coverage through the public exchange has to pay more than 8.5% of their household income for the benchmark plan (the benchmark plan offers coverage comparable to that available under Medicare Part A, B, and D – and typically has a lower deductible than the combined Medicare deductibles).

    This isn’t a question of “affordability” but “prioritization”, for the vast majority of Americans. When you poll Americans, many, perhaps a majority, now believe health care should be a right, and that someone else should pay. As more than one told me in a federal government sponsored focus group long ago, prior to our 2010 health reform, “I want the best health care coverage YOUR money will buy.”

  2. BenefitJack says:

    In terms of the retirement changes in SECURE 2.0, Congress can stop patting themselves on the back. All of these changes and the state-mandated IRAs are nothing more than “colored bubbles” in terms of retirement preparation – unless and until Congress acts to resolve the inadequate funding for Social Security and Medicare entitlements. Both trust funds are projected to be exhausted in the next decade or so.

    As America’s national debt blows past $30 Trillion, and as we are projected to add $1+T to the debt via annual deficits for as far as the eye can see or the Congressional Budget Office is willing to project, Congress seems unwilling to address entitlement funding issues.

    30 years ago, on November 5th, 1993, President Bill Clinton, by Executive Order #12878, created the Bipartisan Commission on Entitlement Reform (the Danforth Commission) to evaluate entitlement programs – specifically Social Security and Medicare. The Commission never reached consensus and couldn’t get all members to agree on even an Interim Report. Subsets of the commission members made their own proposals. None gained any traction, nor action. See:

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