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These Key Policy Changes Are Needed to Help Americans Retire Securely, Experts Say

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Many Americans are at risk of not having enough money in retirement.

Now several organizations are calling on the Biden administration to do something about it.

Specifically, these groups want the administration to form an inter-agency task force that will focus solely on addressing issues like student debt, emergency savings and long-term retirement security.

The request was sent last month in a letter signed by 31 members of the Bipartisan Policy Center's Funding Our Future initiative, including ADP, Edelman Financial Engines and the National Institute on Retirement Security.

"The proverbial three-legged retirement stool is shakier than ever. Social Security and Medicare face financing shortfalls, while pension plans have largely disappeared for younger workers," the letter stated.

"At the same time, rising life expectancies, soaring health and long-term care costs, and rock-bottom interest rates have created new risks to retirement security."

The hope is that the task force will streamline the help available to Americans to become more financially secure.

Half of U.S. households will not have enough retirement income to maintain their pre-retirement standard of living, according to the Center for Retirement Research at Boston College.

Social Security only has enough funds to pay full benefits until 2033 and Medicare is projected to be depleted in 2026.

Meanwhile, more than 44 million people owe a collective $1.7 trillion in student loan debt and, according to Bankrate, and 51% of Americans have less than three months' worth of emergency savings.

"If people aren't able to withstand a crisis like the pandemic or another emergency, how are people actually going to be able to retire with dignity or retire at all?" said Alejandra Montoya-Boyer, director of policy at Prosperity Now, which also signed the letter.

Policy fixes

Prosperity Now, which focuses on the racial wealth gap in the country, would like to see the expansion of the child tax credit and earned income tax credit become permanent.

Beyond that, there should be accessible tools for wealth creation, like affordable home ownership and access to quality education, Montoya-Boyer said.

"We need a system that allows for people to have good jobs," she said.

"Their kids need to be able to have access to care, and people need access to homeownership or at least access to affordable housing," Montoya-Boyer added.

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Then there is the issue of Social Security funding, which needs to be addressed by Congress.

The lack of confidence in the program is impacting people's decisions on when to apply, said Steve Vernon, president of retirement education company, Rest of Life Communications.

"If you are worried about it going bankrupt then, you will take it as soon as you can get it," he said.

However, the longer you wait to take the benefit, the higher your payments will be.

It's also important help the 50% of the U.S. workforce that doesn't have access to an employer-sponsored retirement plan, noted Vernon, author of "Live Long & Prosper! Invest in Your Happiness, Health and Wealth for Retirement and Beyond."

"Having a savings plan at work makes a big difference in enabling ordinary workers to accumulate money," he said.

Meanwhile, those in their 50s and 60s who don't have enough saved for retirement will have to work longer. Making Medicare the primary payer for those over 65 will help encourage employers to hire more older workers, Vernon suggested.

"Then the health-care costs for those older workers will go way down," he said. "That is sending a message that we need to keep older people in the workforce."

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