To the Editor:
Your editorial portrays the “grim reality” facing retirees: an uncertain financial market, inadequate savings and employer contributions, shift of all risks to workers (investment, longevity) and so on. And the solutions are unsatisfactorily focused on patching up existing arrangements.
Fortunately, a superb answer is available: Simply expand Social Security to provide a benefit to replace 70 percent of average pay rather than the current 41 percent.
Consider: It’s already set up as a national plan, does not depend on anyone’s investment acumen, avoids financial chicanery, has expenses that are ridiculously low, provides longevity and cost-of-living guarantees, and has built-in job portability.
And the increase in cost may be surprisingly small; it will be offset by many factors, including raising the taxable wage base, use of a large part of the current $2.4 trillion surplus, and folding in the assets of existing plans by a reasonable trade-off. Definitely worth thinking about.
David Langer
New York, Jan. 27, 2009
The writer is a consulting actuary.
Note from KBJ: Nanny state.
