President Obama's MyRA proposal, announced at the State of the Union, is not enough to save the retirement system. At least that's the takeaway from two columns on the plan:
- "The system is failing," write the editors at Bloomberg. Workers aren't saving enough, employers aren't contributing enough, and Social Security benefits will barely keep people afloat when they can no longer work. But, unless some sort of incentive is given or unless they're forced to opt in, most people won't participate in MyRA, either. And without congressional approval, employers can't be forced to offer MyRA plans. So how do we fix this broken system? It will be a long process, requiring bold moves including "gradual reform of Social Security ... so that more generous benefits are given to those who need them, with the cost recouped from the better-off through lower benefits and higher contributions." Full column here.
- At the Los Angeles Times, Michael Hiltzik agrees: Sure, this isn't a bad idea, but it doesn't go far enough. MyRA yields will be low, and the temptation to withdraw money early will be high. In fact, all of Obama's proposed ideas so far have been "only token solutions to the retirement income gap." The truth is, a "retirement crisis is looming for millions of Americans." One potential solution supported by a small but growing number of those in Congress: Increase Social Security benefits. Full column here.