A “Super” Time to Save for Retirement

This week, a group that works to make sure people get their promised pensions gave me a “Superhero” award for my work on retirement income security.  The award came with a caricature of me in a Superhero costume. 

It’s a little embarrassing to be drawn wearing a cape, but if it gets people talking about a serious subject like pensions and retirement savings, that’s a good thing. 

It’s human nature to postpone thinking about financial needs that are years into the future.  Most people are busy enough with the daily chores of working and paying bills.  Pensions and retirement accounts are dry, technical topics.  Who wouldn’t rather watch a basketball game than study lump-sum payments and annuities?

But we all need to overcome our instincts to run away from retirement planning. Most Americans are under-prepared at retirement age.  Our national savings rate is very low.  Through my years as a Senate committee leader, I’ve heard a lot of expert testimony on the critical need to save for retirement through as many means as possible: employer pensions, individual savings, Social Security, and anything else available.  Studies show that people grossly underestimate the amount of money they’ll need, especially with life expectancies getting longer all the time. 

Unfortunately, employer-provided pensions are no longer as common as they once were.  And in recent years, some employers who offered pension benefits found themselves having promised more than they could deliver.  Employees were rightly afraid and angry.  In 2006, after the Enron and United Airlines retirement savings and pension debacles, among others, Congress enacted the most sweeping pension legislation in more than 30 years.  As one of the key authors of that law, I helped to stop the game-playing by which corporations indicated that their pensions are in better shape than they really are.

In addition, the law made permanent the increased amounts that people can put away in their 401(k) and Individual Retirement Accounts. Other provisions made permanent are the savers credit for low- and middle-income taxpayers and the ability for individuals over the age of 50 to make “catch up” contributions to increase their retirement income security.  As then-chairman of the tax-writing Committee on Finance, I shepherded those provisions into law on a temporary basis in 2001 and was glad to help make them permanent in 2006, via the pension law.

The Pension Rights Center gave me a “Superhero” award in part for helping to make pension counseling projects, established by the Administration on Aging, a permanent part of the Older Americans Act. Today, there are six pension counseling projects providing counseling and referral services to people in 29 states, including Iowa, helping people unravel the technical details of their pension benefits.

My message to my children, grandchildren and anyone else who will listen is, using as many resources as you can find, it’s always a “super” time to start saving for retirement.