We have a savings crisis in this country, and if left unattended, we are well on our way toward a retirement crisis that will impact each one of us and those we love.
Almost a third of Americans have $100 or less in their savings, and the majority have less than $1,000. About 13 percent have over $10,000 in savings, but please tell me how far $10,000 will get you over your golden years? As if this wasn’t bad enough, these numbers are worse for people living in rural America. And despite the way that politicians try to outdo each other in promising that they are the true guardians of Social Security, its ability to fund the promises made becomes more fragile with each passing day. Social Security now has funding that would allow it to deliver on 77 percent of what has been promised, and a recent Trustees report found “significant funding issues.” Changes will be made here and they will hurt all of us who are counting on Social Security over our retirements, yet the Supreme Court decision of Flemming v. Nestor in 1960 said that none of us have any legal claim to “our” Social Security. Congress can change your benefits as they see fit.
With this situation some will say be patient and count on Washington to fix it, but I’d say with something as important as one’s retirement it’s time to make other plans.
There are a lot of things we can do here, but as a Republican I like the bicameral bill reintroduced in Congress toward the end of 2023 by Sen. Thom Tillis (R-N.C.) and Rep. Lloyd Smucker (R-Pa.). This commonsense solution even has backing across the aisle from Sen. John Hickenlooper (D-Colo.) and Rep. Terri Sewell (D-Ala.). It is called the Retirement Savings for Americans Act (RSA), and it would give Americans a much-needed return on their tax dollars by helping set them up for the retirement they deserve.
The bill specifically helps low- and middle-income Americans by expanding access to retirement savings accounts for workers that do not have access to an employer-sponsored plan. The bill would also offer federal matching contributions for those with qualifying incomes. Big government bureaucrats wouldn’t own these accounts under the bill. Instead, workers would be able to pass the savings down to future generations and help build generational wealth. This is a big deal at two levels. One, while radical politicians can monkey around with money in, or promised from, Washington, it gets a whole lot tougher when it’s in your local bank. This bill keeps Washington out of your cookie jar. Two, as Jesse Jackson observed years ago, Capitalism without capital…is just “ism.” Capital…your own savings…is a vital building block to narrowing the wealth inequality that represents the divide between those who have money and those who don’t. It’s also key to building wealth with families and in small communities because money grows over time and the ability to hand it down through time helps each succeeding generation. But to give it, you gotta have it.
Conservatives should especially applaud the benefit rural communities would see from this legislation. On average, rural families earn 25 percent less than urban families, but it’s not just lower earnings that get in the way of retirement plans. These areas have generally lost population since 2000, leaving already sparsely populated areas with even more barriers to saving for retirement. Big companies in big cities are apt to have a retirement plan, your local logger not so much. Yet we have all seen those little towns wherein people just don’t have money, and the personal savings created in a bill like the RSA primes the pump in giving life to individuals and rural communities. Retirees with savings go out and support local restaurants, shops, services—you name it. What’s more, getting these folks in a better position for retirement means fewer people needing to rely on costly government assistance programs, saving taxpayer money in the long run. As a former Republican governor, this is the kind of pro-taxpayer policy that I like to see.
So as with all challenges that come through Washington, there is an answer that suggests doubling down on giving Washington a little more control is the answer — and an opposing point of view that says let’s get more power and authority out of DC. The RSA subscribes to the second path and in so doing, helps all of us in growing personal wealth, allowing individuals to prepare for the savings crisis headed our way, and in working to close the rural vs. urban income divide before us. Addressing those three things makes for a good day’s work, and accordingly, lawmakers should give the looming financial and fairness challenges confronting us the attention they deserve and make the RSA a priority in the new year.
