So many plans, so little effect on financial security. That’s partly because these aren’t auto-enroll programs: Savers have to opt in. For many, the complexity is surely paralyzing: The policies offer incentives to save, but you need an accountant to guide you through the options. Most important, these programs weren’t designed with low-wage workers in mind.
It’s a ridiculous mess. Harkin’s proposal is a good one, but it should ideally be adopted as part of a thorough simplification of incentives for saving — one that gives subsidies and tax preferences to the savers who need them most and, as income rises, withdraws this support at a measured and deliberate pace.
Comprehensive reform of anything is a lot to ask these days — especially when it requires foresight, because the worst of the problem lies ahead. Failure to confront this issue in the past has already condemned many to a severely pinched retirement. For the rest, it isn’t too late.