A platform everyone can stand on: retirement accounts
Having watched the first Democratic presidential debate last week, I feel as though I could have easily qualified for a spot in the lineup — if I’d wanted to.
Instead, I’m declaring my candidacy for national personal financial benevolent dictator — or NPFBD, which just rolls off the tongue nicely — a position that happens to also include the extraordinary legislative power to pass my most important ideas.
My first three policy ideas deal with the crisis of retirement.
This is the crisis: About half of American households have zero net worth, and 29 percent of older Americans have virtually no retirement savings. The returns on Social Security savings are low, the enrollment in workplace retirement accounts is weak, and the costs of investing are too high. As NPFBD, I will solve all this. For you fervent capitalists, very little will change under my dictatorship — you can continue to save and invest as you always have, and the program is revenue neutral. Read my lips: No new taxes.
For you budding socialists, I think you will find my benevolent dictatorship addresses the problem of poverty and financial insecurity at retirement through important government interventions.
Policy No. 1: Automatic enrollment in workplace retirement accounts. As benevolent dictator, my fellow Americans won’t be able to make the mistake of not enrolling in a workplace retirement account that mistake. The day you start your job is the day the HR department at work directs a portion of your paycheck to a retirement account. No ifs, ands or buts. You’re also automatically invested in an age-appropriate investment fund. You can improve upon that fund choice later by taking charge of your investments, but the default fund will be thoughtfully chosen (by me, your NPFBD), according to your age, and adjusted annually.
Policy No. 2: Private market investing of federal payroll deductions. In addition to automatic enrollment, I’m going to reform the nation’s primary defined-benefit plan for retirees.
Part of every paycheck you receive will be withheld by the federal government, and you’ll get the money back at retirement — but more than you put in. Through the decades of your working life, this money will be invested by the federal government in private high-return assets, like diversified stock mutual funds.
Now, you’re probably thinking, “So, let me see here … the feds take part of every paycheck throughout my working life, and then I get my money back in retirement. Well um, that’s … that’s Social Security! This columnist thinks he’s invented Social Security.”
Fine. Yes, there’s a resemblance. But the improvement I’m highlighting as NPFBD is that under my plan, the money taken throughout our working life is actually invested — in stocks and mutual funds and stuff that grows in value over time.
OK, so, yeah — it’s a partial privatization of Social Security. Deal with it. You elected me to be NPFBD for a reason.
Also, to make this partial privatization the best deal possible, we have to roll out Policy No. 3 at the same time.
Policy No. 3: Universal access to the Thrift Savings Plan. The TSP is currently only open to federal employees.
Anyone who is a federal worker with access to TSP retirement accounts already knows that these funds are amazing. Not because they employ brilliant managers of money, as brilliance in money management is overrated, but because they offer some of the lowest cost funds in the world.
As my campaign for NPFBD continues to gather momentum, I will release more of my platform in the future. In the meantime, you are welcome to send me your own crazy-but-good ideas to roll out as your benevolent dictator.