Americans still careless about retirement planning

The biggest change ever in how Americans live in retirement is about to happen and it is no surprise that Americans are still disengaged. In a survey by The Pew Research Center for the People and the Press in late January, only about a quarter of Americans (23%) said they heard a lot about the proposal for private Social Security accounts; another 43% said they had heard a little, while 33% had heard nothing at all.

The American public needs to have a more direct voice in the emerging Social Security reform debate, urged AmericaSpeaks, a nonpartisan organization that directed the landmark "Americans Discuss Social Security" project in 1998-99. The bipartisan project, funded by The Pew Charitable Trusts and chaired by Senator Charles E. Grassley and the late Senator Patrick Daniel Moynihan, brought more than 50,000 people from cities in all 50 states together in town hall meetings, video conferences and other forums to learn in-depth about Social Security issues. Participants discussed reform options with fellow citizens, lawmakers and experts, and then offered their own opinions about the future of Social Security.

At this time, the major mistake committed by President Bush in marketing the idea to American people is the lack of details. In other words, the details on actual proposals are sketchy and that has allowed all parties to create plenty of confusion. When an average American's understanding of Social Security is limited to receiving a check in the mail after retirement or other benefit when they need it, privatization and private Social Security accounts sound like rocket science to them. (Related article: Details on private retirement investment accounts are sketchy)

But as the media has started to raise awareness of the issue, Americans are starting to think about it. "After holding dozens of town hall meetings on the Social Security issue, it became clear that Americans are willing to learn about the complexities of the issue, make compromises, and are open to reform ideas," said Carolyn J. Lukensmeyer, who directed the Americans Discuss Social Security project and is the President and Founder of AmericaSpeaks. "When citizens have the opportunity to hear all sides of the Social Security issue, they can best decide how to address possible solutions. The current debate about Social Security simply must include the voices of citizens." (Related article: Americans are still confused about what they want to do with Social Security)

The Americans Discuss Social Security project found that nearly 70 percent of all participants felt they would be required to give something up for the program to continue. Participants were most willing to consider reform options such as increasing payroll taxes above the current cap, reducing benefits for people with higher incomes, and permitting workers to direct a share of their Social Security contributions to private investments. The project also revealed that when citizens are presented a choice between retirement accounts and a guaranteed exact benefit nearly two-thirds said they would prefer to keep the guaranteed benefit. These findings are pretty consistent with all other surveys and reconfirm our great American value - We want it all! (Related article: Americans oppose privatization of Social Security if benefits are not guaranteed)

Unfortunately, that is unlikely to happen. The opposition to raising any kinds of taxes on anyone (and definitely not on the wealthy) is strong in the Bush administration, there is a lot of pressure on President Bush from his campaign contributors on Wall Street and from conservative think tanks like Cato that are driving this policy change, and private Social Security investment accounts are in no way designed to guarantee the solvency of Social Security. In summary, what is very likely to happen is that some form of retirement accounts will be created, and with inflation-indexation (rather than wage indexation that we have now) of retirement benefits, incomes of retirees and other beneficiaries will see a steep drop. No wonder the AARP has declared a war on Social Security privatization.

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