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NCPA Policy Chairman
Policy Chairman Mike Whalen is one of the driving forces behind the NCPA's retirement reform efforts. “As early as next year the first of the 77 million Baby Boomers will begin to retire, and America is totally unprepared for it. This will mark the beginning over a massive conflict over resources. Can Americans protect themselves from what's coming? Yes, but it will require a fundamental rethinking of how we prepare for retirement,” Whalen said. Whalen’s interest in retirement reform stems from his involvement in public affairs on the local, state and national levels, and in his role as an employer. He developed, owns and operates 22 restaurants and hotels in seven metropolitan areas in five Midwestern states.
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An analysis by the NCPA finds that a $30,000 loan could cost a worker more than $600,000 in retirement income! See our recent publication, “ 401(k) Loans = Retirement Insecurity ,” and our new 401(k) Borrowing Calculator.
What's New
Thinking About Tomorrow
How large is the federal government’s debt? The figure most likely to be reported in newspapers is the debt held by the public. This measure currently stands at $6.3 tril- lion and is rising. However, the debt held by the public tells only a small part of the story. How should the government account for the predicted shortfalls of Social Se- curity and Medicare? Officially, they are considered government "obligations," but not "liabilities" or "debts." The reason: retirees and workers do not have a contractual right to the benefits they expect to receive.
To read the entire study, click here.
A Framework for Medicare Reform
The most important domestic policy problem this country faces is health care. The most important component of that problem is Medicare. Forecasts by every federal agency that produces such simulations - the Congressional Budget Office (CBO), the Social Security/Medicare Trustees, the General Accounting Office (GAO) - show that we are on a dangerous and unsustainable path. Indeed, the question is not: Will reform take place? The question is: How painful will reform have to be?
To read the entire study, click here.
To Roth or Not?
In 2006, the Roth 401(k) plan was introduced as an alternative to regular 401(k)s. Whereas contributions to regular 401(k)s are made with pretax dollars, Roth 401(k) contributions are made with after-tax dollars. When retirees withdraw their funds from regular 401(k)s, the contributions and accumulated earnings are taxable. But since taxes have already been paid on Roth contributions, all of the funds in the Roth account can be withdrawn tax-free. Which type of 401(k) is better?
To read the entire study, click here.
Medicare Spending Across the Map
Though talk of fundamentally reforming Medicare has been limited lately, the baby boomers' imminent retirement and the continued rise in health care costs will force Medicare back to the forefront of upcoming policy discussions.
The Medicare Trustees and the Congressional Budget Office both predict that Medicare spending as a percentage of gross domestic product (GDP) will double by 2030. Therefore, all possible means of making Medicare more efficient should be considered in light of its increasing importance to taxpayers. One possible avenue for reform is seen in the wide regional variations in Medicare spending that exist and have persisted through time. If Medicare reimbursements could be constrained to the levels existing in the lower cost areas, the program's costs could be reduced significantly.
To read the entire study, click here.