Everyone should be concerned about social security and 401 (k) plans – including presidential candidates

<pre><pre>Everyone should be concerned about social security and 401 (k) plans - including presidential candidates

Democratic candidates have voiced their opinion on climate change, general health care, and the current president for months, but Tuesday is the seventh and final debate before the primary election begins – and they still haven't talked much about America's future financial security.

Candidates have only a limited amount of time on stage to convince voters, but they have missed a great opportunity in the past six debates.

Pensioner issues are important because (ultimately) they affect all voters. Most urgently, there is a large group of older voters who tend to vote more than their younger counterparts. However, all Americans will age and need to know if and how they feel comfortable and can be financially secure.

Social security fluctuates, Americans do not save enough, some companies' pensions go bankrupt, and there is little clarity on other complex retirement and aging issues, how to get the best advice from financial professionals, and what benefits are available in old age. Tuesday's debate would be a good time to share your thoughts.

See: 20 New Year's resolutions to make your retirement dreams come true

Some of the President's hopefuls spoke of retirement and old age in the election campaign. Indiana Pete Buttigieg said he wanted older Americans to have more options for long-term care, and during the fourth debate, Senator Amy Klobuchar of Minnesota said that long-term care was something that "ordinary Americans" care about. She called the aging population a "silver wave".

Still, more can be done, pension experts say. Here are some key points that could help voters make their decisions:

Social Security

The two trust funds that support the social security system are expected to run out of money over the next 15 years, if they do, Americans will still get a benefit – but about 80% of what they owe.

Candidates and politicians tend to stay away from the social security debate, which is considered the "third rail" of politics, but Americans need answers, said Alicia Munnell, director of the Center for Retirement Research at Boston College. "It's time to talk about social security – it's the backbone of retirement," she said. "The American people need to know where the candidates are."

Even though their positions may be similar considering that they are all Democrats, it would be helpful to hear plans for strengthening social security, such as: B. Suggestions for avoiding benefit cuts or if you think the program can be expanded. About 40% of older Americans rely on social security alone after retirement, according to the National Institute on Retirement Security. Social security benefits typically replace 40% of early retirement income, although advisers recommend that retirees should have sufficient income (between savings, social security, and other sources) to replace 70% of their previous salary. The estimated average retirement pension for social security in 2020 is AARP $ 1,500 per month.

Fiduciary responsibility

The wrong financial advisor for retirement advice could cost Americans their lives. Obama-era legislation, known as the Trust Rule, is designed to mitigate some of the risks and potentially high fees customers face when looking for a financial advisor to help them plan their future. The trust rule was killed early in the Trump administration.

Financial advisors still say that understanding what types of advisors are available would help pensioners and pensioners immensely.

"Yes, retirement plans, social security, etc. are important, but if the advisors who do this advice are not real trustees, Americans are still at risk," said Ian Harvey, financial advisor at Bridgewater Advisors in New York.

This could also lead to further discussions about financial education, said Harvey. "We have to train Americans earlier in financial matters and teach them how to start on their own."

See also: If your student debts go away, would you save more for retirement?

American retirement assets (or lack thereof)

Not all Americans are prepared for retirement. Only about half of workers have access to a 401 (k) plan, and even if they do, they may not be able to afford to save enough for a comfortable retirement. Pensions are far less popular than 40 years ago, when 401 (k) plans were introduced and some plans for multiple employers fail (which means that retirees participating in them receive low benefits). Those who have trouble saving say they have other financial obligations, including expensive rents and mortgages that weaken student loans and childcare or parental support.

States are starting to get more involved. California, Oregon, Illinois and other countries have laws that allow companies (and in some cases require) to offer individual retirement accounts to their employees. These accounts are treated as a 401 (k) plan, which allows employees to pay part of their salary into a pension plan. The programs, known as Auto IRA plans, are automatically registered by employees for the program, and some automatically escalate contributions.

Many Americans, especially younger ones, fear that they will never have a chance to retire. It would be a feast for the eyes if the candidates discussed where exactly young people fit in and how they could be on the path to financial stability, said Jamie Hopkins, director of pension research at the Carson Group wealth management company in Omaha, Neb The whole term of retirement seems to be very far away, ”he said, especially when it comes to current financial problems such as expensive childcare or the repayment of student debts.

Retirement provision is becoming the lifeline of Americans in old age, and discussing coverage plans and efficient ways to keep money for the future could benefit voters now and in the long term, Munnell said.

"No matter what we do with social security, most people will need something else," said Munnell. "People who only rely on 401 (k) or who have nothing but social security will face a lot of stress when they retire."