Communiqué
Where Clinton and Trump Stand on Retirement Security
By: Next Avenue
Posted on:
By Richard Eisenberg / Next Avenue
(This is the third in a series of Next Avenue blog posts on where presidential candidates Donald Trump and Hillary Clinton stand on key issues of interest to Americans over 50. The first article was about where Trump and Clinton stand on Social Security. The second article was about where they stand on health care and Medicare.)
Not-so-funny thing about trying to suss out where Hillary Clinton and Donald Trump stand on retirement security matters for Americans: There’s very little to go on. (But that’s not stopping me from providing the best head-to-head comparisons I can, below.)
Neither candidate spoke about retirement security in their big economic speeches last week. Their websites are mostly mute, too, aside from talk about Social Security. The Democratic platform says its party believes in “protecting every American’s right to retire with dignity,” but I don’t know what that means. Similarly, the Republican platform says its party accepts “the responsibility to preserve and modernize a system of retirement security.” Not sure I understand that either.
On Retirement Security, Mum’s the Word
Never mind that the topic of retirement security is broad enough to include: retirement plans and savings incentives; the costs of long-term care, retirement health care and housing; layoffs of older workers; entrepreneurship and part-time work in retirement; age discrimination at work and, of course, Social Security. Or that America’s 76 million boomers are starting to retire or getting close to it.
The Democratic platform says its party believes in “protecting every American’s right to retire with dignity,” but I don’t know what that means.
No wonder 68 percent of American workers surveyed by the Financial Services Roundtable said the candidates haven’t been talking enough about ensuring that Americans have a secure retirement. They think they should. A new Charles Schwab survey found that 77 percent of respondents considered the ability to save enough for retirement to be a “major public policy issue.”
Retirement experts from Time’s Dan Kadlec to Huffington Post’s Bailey Childers (of the National Public Pension Coalition) to financial pros in the newspaper Pensions & Investments to elder advocate Bob Blancato have bemoaned the near radio silence from the candidates about retirement security. The Financial Services Roundtable has even made things super easy for Trump and Clinton by listing 10 questions they should answer about it.
Ken Dychtwald, CEO of the Age Wave consultancy, says Clinton and Trump need to tell us how they will avert “a new era of mass elder poverty.” He notes that 52 percent of all households headed by someone age 55+ have no retirement savings. “Preventing a new era of mass elder poverty is a demographic issue that wlll affect us all — in our minds, hearts and wallets,” notes Dychtwald.
Now on to Trump and Clinton, head-to-head, on retirement security:
Social Security
You can see a lengthy explanation of Trump’s and Clinton’s Social Security proposals in this Next Avenue article. But here’s a thumbnail version:
Donald Trump: He has said “I will do everything within my power not to touch Social Security.” That includes not raising the retirement age, cutting benefits, raising the Social Security payroll “tax cap” (the $118,500 ceiling on earnings subject to FICA taxes) or altering Social Security’s annual Cost of Living Adjustments.
The Social Security Trust Fund is not expected to have enough money to pay full benefits starting in 2034, though. Trump’s solution to generate enough payroll taxes is bringing back jobs and getting rid of government “deficits, waste, fraud and abuse.” But, he told AARP, “As our demography changes, a prudent administration would begin to examine what changes might be necessary for future generations.”
Hillary Clinton: She’s against cutting Social Security benefits, raising Social Security’s retirement age or reducing annual Cost of Living Adjustments. Her plan to address the system’s solvency and ensure Americans receive their promised Social Security benefits is to raise payroll taxes on people earning more than $250,000. She also told AARP she favors taxing some income of the highest-income Americans that’s not currently taxed.
Clinton also wants to increase Social Security benefits for widows and people who take time off for family caregiving duties.
Retirement Saving Plans and Incentives
Roughly half of private-sector workers — 55 million Americans — lack access to 401(k) or 403(b) employer-sponsored retirement plans. And retirement savings figures, overall, are frighteningly low. Blancato wrote on Next Avenue that he’d like to ask the candidates: “Americans need to save more. What policies would you adopt to help achieve this?”
Donald Trump: I’ve been unable to find any Trump proposals or views on ways to help Americans save for retirement. (If you have, please let me know and I’ll update this post accordingly.)
Hillary Clinton: She’s been pretty silent, too. The Democratic platform offers a few vague clues, though. “Democrats believe it should be easier for Americans to save for retirement and prepare for unforeseen risks and expenses,” it says. Also: “We will defend the right of workers to collect their defined benefit pensions and make sure workers get priority and protection when pension plans are in distress. Democrats will also fight to enact legislation to make sure that the earned pension benefits of Americans will not be cut.” No specifics on these, though.
The Democratic platform strongly supports the Obama administration’s new Fiduciary Rule, designed to ensure that financial advisers put clients’ interests first for their retirement accounts. “We will fight against any attempt by Republicans in Congress or on Wall Street to roll back the Conflict of Interest Rule,” the platform says.
You can get a hint of Clinton’s views on 401(k)s by the choice of one of her top economic advisers: Teresa Ghilarducci. She’s a labor economist at The New School pushing to replace the voluntary 401(k) system with a mandated Guaranteed Retirement Account program. It would require contributions of at least 1.5 percent of pay by all workers and employers. (Ghiarducci also thinks the FICA tax should be raised so long-term care would be added to Medicare’s coverage.)
Older Workers
Washington Post columnist Catherine Rampell nailed it in her story last week, “There’s no easy answer for the bereft boomer worker.” As Rampell wrote, “Neither candidate has grappled with what may be the most challenging economic crisis of our times: what to do with older workers whose jobs have disappeared and are never coming back — and who are injecting so much frustration (and rage) into this election cycle.
Donald Trump: Here again, Trump hasn’t said much, other than his overarching theme of bringing back jobs.
But the Republican platform hit two points (whether Trump endorses them is unclear): To boost entrepreneurship, it said, “We should reduce the occupational licensing laws that shut untold millions of potential workers out of entrepreneurial careers.” And the party seems to oppose age discrimination in the workplace (as well as all other types): “Clear nondiscrimination policies ensure all employees have the chance to succeed based solely on their merits.”
Hillary Clinton: There’s not much from Clinton about older workers, either.
She recently proposed giving businesses a $1,500 tax credit for each apprentice they hire. That may sound like something just for younger workers, but Clinton said “it also should be for older workers.” She also wants to centralize the federal government’s job training resources onto one online platform.
And the Democratic platform said the nation needs to “support entrepreneurship.” (Hard to argue with that.)
The Cost of Living in Retirement
Donald Trump: As my Next Avenue colleague Emily Gurnon wrote, Trump wants to lower health costs by: allowing the sale of health insurance across state lines; letting Medicare negotiate prescription drug prices; and allowing the importation of less-expensive prescription drugs from foreign countries.
Beyond that, I haven’t seen any policy proposals from Trump to help retirees manage other costs, such as long-term care or housing.
Hillary Clinton: To keep older Americans’ health costs down, as Gurnon noted, Clinton supports: a “public option” within Obamacare (a government-run health insurance plan that would compete against private insurers); letting people as young as 50 or 55 voluntarily pay to join Medicare; requiring insurers and employers to provide up to three sick visits to a doctor per year without needing to meet the plan’s deductible first; a new refundable tax credit of up to $5,000 per family for “excessive out-of-pocket [health care] costs; “competition to get more generics on the market” and “cap what insurers can charge consumers in out-of-pocket costs.”
Clinton also agrees with Trump that Medicare should be able to negotiate prescription drug prices for beneficiaries.
The Democratic platform offered a nod toward reducing high long-term care costs and housing costs.
“Democrats will take steps to…give seniors and people with disabilities access to quality, affordable long-term care, services and supports,” it said — though without specifics.
The platform’s stand on housing seems focused on people living in, or wanting to live in, cities. “We will preserve and increase the supply of affordable rental housing by expanding incentives to ease local barriers to building new affordable rental housing developments in areas of economic opportunity,” the platform said. “We will substantially increase funding for the National Housing Trust Fund to construct, preserve and rehabilitate millions of affordable housing rental units.”