9 Ways Americans Want the Government to Fix Retirement

As the stock market hovers in bear territory, the threat of recession looms overhead and extraordinary inflation continues to chip away at workers’ budgets, many of us are more concerned than usual about our retirement plans.

As the recently released 22nd Annual Transamerica Retirement Survey shows, many of these concerns are not simple unease. There are very specific things many workers would like to see the federal government tackle in order to shore up retirement.

Here’s a look at what workers say should be top government priorities, according to the 5,846 adults polled for the survey.

7. Expand the saver’s credit (tie)

Respondents who think this should be a priority for the president and Congress to improve retirement security: 30%

The saver’s credit is an often overlooked tax break that is available to any eligible taxpayer putting away money in a retirement account. Essentially, you’re rewarded for saving money by saving more money.

For the 2022 tax year, it’s available to those with an adjusted gross income of not more than:

• $68,000 if married filing jointly
• $51,000 for heads of household
• $34,000 for all other taxpayers

It can knock as much as $2,000 off your tax bill each year.

7. Teach financial literacy in schools (tie)

Respondents who think this should be a priority for the president and Congress to improve retirement security: 30%

In 2021, a study from financial advice company SmartAsset found only 7% of adults could correctly answer six questions that covered topics related to savings, debt, interest and investment.

If these topics were taught early in life, it’s reasonable to think good financial habits would become ingrained and reduce the kind of expensive mistakes that shortchange retirement for many.

7. Make long-term care more affordable (tie)

Respondents who think this should be a priority for the president and Congress to improve retirement security: 30%

Most Americans turning age 65 will need long-term care at some point in their lives, according to the U.S. Department of Health and Human Services. This kind of care includes things like assistance getting dressed, traveling to appointments and preparing meals. It may be offered through in-home health aides or at nursing homes and assisted living facilities.

It’s not cheap. A home health aide typically costs more than $5,100 per month, while a private room in a nursing home costs more than $9,000 per month, according to life insurer Genworth.

6. Make retirement plans more accessible

Respondents who think this should be a priority for the president and Congress to improve retirement security: 31%

There’s a big gap between the number of people whose jobs offer a retirement plan such as a 401(k) — 72%, according to the Congressional Research Service — and the number of people who use one. Only 56% of workers were participating as of March 2021.

Some people may be saving and investing outside a retirement plan, but that means they’re missing out on significant benefits, as we explain in “7 Mistakes Guaranteed to Ruin Your Retirement“:

“A typical savings account isn’t going to cut it.

Instead, put that money in tax-advantaged retirement accounts such as 401(k) plans or individual retirement accounts (IRAs). These accounts come with tax benefits as well as stiff penalties for early withdrawals. […]

And by all means, if your employer offers a 401(k) match, put your retirement savings there first. You’d be a fool to pass up that free money.”

5. Create policies to support family caregivers

Respondents who think this should be a priority for the president and Congress to improve retirement security: 32%

Taking care of an aging parent, injured spouse or child with a disability can be a thankless job, and nearly 1 in 3 workers would like to see that change. Three-quarters of family caregivers regularly spend money out-of-pocket, and average annual caregiver costs are more than $7,200 per year, according to AARP. Overall, caregivers report, on average, spending a quarter of their entire income on caregiving expenses.

Paid family and medical leave, tax credits for out-of-pocket costs and Social Security work credits are some ways to lighten the burden.

4. Increase access to affordable housing

Respondents who think this should be a priority for the president and Congress to improve retirement security: 33%

More than 17 million U.S. households spend half of their income or more on housing, according to Habitat for Humanity. That’s a tough nut to crack once you’re living on a fixed income, but we have some ideas in “8 Ways to Cut Housing Costs in Retirement.”

3. Fix funding for Medicare

Respondents who think this should be a priority for the president and Congress to improve retirement security: 41%

“Medicare costs will continue to grow faster than [gross domestic product] through the late 2070s due to projected increases in the volume and intensity of services provided,” according to the Social Security Administration. That could mean more costs being passed on to retirees.

As it is, senior households already spend about 14% of their income on health care.

2. Reduce out-of-pocket costs on health care and prescription drugs

Respondents who think this should be a priority for the president and Congress to improve retirement security: 42%

Along the same lines, overall national health spending is expected to grow by an average of 5.1% per year between 2021 and 2030, according to the Centers for Medicare and Medicaid Services. Out-of-pocket costs are expected to represent 9% of total spending by 2030.

Rather than waiting for government action to bring down costs, check out “4 Pharmacy Chains That Offer Free Medications.”

1. Fix funding for Social Security

Respondents who think this should be a priority for the president and Congress to improve retirement security: 51%

Social Security and Medicare are two parts of the same problem, according to the Social Security Administration. “Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing,” says a government summary of the programs’ 2022 trustees report. “Costs of both programs will grow faster than gross domestic product (GDP) through the mid-2030s primarily due to the rapid aging of the U.S. population.”

In 2021, Social Security paid out $56 billion more than it took in, and trust fund reserves for retirement benefits are currently expected to run dry by 2034. That’s not encouraging news for anyone retiring after that date. However, as Money Talks News founder Stacy Johnson explained in 2021, this doom and gloom is nothing new: “These same types of stories have been going around since I became an investment adviser 40 years ago.”