Study: COVID-19 Changes Way Americans Think About Retirement

Published in RINewsToday on November 23

The raging coronavirus pandemic is changing the fundamental way working adults think, plan and save for their retirement, underscoring the important role Social Security and Medicare play for retirees, according to the 2020 Wells Fargo Retirement study conducted by The Harris Poll in August. The annual research report examines the attitudes and savings of working adults, taking a look this year on the impact of the COVID-19 pandemic on retirees.

For those workers whose jobs were negatively impacted by COVID-19 over the last eight months, the Wells Fargo study found that planning for retirement has become even more challenging, with many survey respondents expressing “pessimism” about their life in retirement – or worried if they can even retire.

This year’s Harris Poll conducted 4,590 online interviews, from Aug.3-Aug. 24, including 2,660 working Americans age 18-76 whose employment was not impacted by COVID-19, 725 Americans age 18-76 whose employment was impacted by coronavirus pandemic, 200 high net worth American workers age 18-76, and 1,005 retired Americans, surveying attitudes and behaviors around planning their finances, saving, and investing for retirement.

According to the Wells Fargo study’s findings, 58 percent of workers impacted by the pandemic say they now don’t know if they have enough savings for retirement because of COVID-19, compared to 37 percent of all workers. Moreover, among workers impacted by coronavirus, 70 percent say they are worried about running out of money during their retirement while 61 percent say they are much more afraid of life in retirement, and 61 percent note that pandemic took the joy out of looking forward to retirement.

The study, released Oct. 21, found that COVID-19 has driven some workers even further behind in saving for retirement: Working men reported median retirement savings of $120,000, which compares to $60,000 for working women, say the researchers. Yet for those impacted by COVID-19, men report median retirement savings of $60,000, which compares to $21,000 for women.

“With individual investors now largely responsible for saving and funding their own retirement, disruptive events and economic downturns can have an outsized impact on their outlook,” said Nate Miles, head of Retirement for Wells Fargo Asset Management in a statement releasing the findings of this study. “Our study shows that even for the most disciplined savers, working Americans are not saving enough for retirement. The good news is that for many of today’s workers, there is still time to save and prepare,” he says.

Taking a Close Look on Retirement Savings

The Wells Fargo study also found that women and younger generations are falling behind, too. Women are less sure if they will be able to save enough for retirement, and appear to be in a more precarious financial situation than men. The study findings indicate that almost half of working women (51 percent) say they are saving enough for retirement, or that they are confident they will have enough savings to live comfortably in retirement (51 percent). Those impacted by COVID-19 have saved less than half for retirement than men and are much more pessimistic about their financial lives. In addition, women impacted by COVID-19 are less likely to have access to an employer-sponsored retirement savings plan (59 percent), and are less likely to participate (77 percent).

According to the researchers, Generation Z workers (born between 1997 to 2012) started saving at an earlier age and are participating in employer-based savings programs at a greater rate than other generations, they are nonetheless worried about their future. Fifty-two percent of Generation Z workers say they don’t know if they’ll be able to save enough to retire because of COVID-19, 50 percent say they are much more afraid of life in retirement due to COVID-19, and 52 percent say the pandemic took the joy out of looking forward to retirement.

Remaining Optimistic

“The study found incredible optimism and resiliency among American workers and retirees, which is remarkable in the current [pandemic] environment,” said Kim Ta, head of Client Service and Advice for Wells Fargo Advisors. “As an industry, we must help more investors make a plan for their future so that optimism becomes a reality in retirement,” she said.

The Wells Fargo study findings showed that despite a challenging economy, many American workers and retirees remain optimistic about their current life, their future. Seventy nine percent of the workers say they are very or somewhat satisfied with their current life, in control of their financial life (79 percent), are able to pay their monthly bills (95 percent). Eight six percent say they are still able to manage their finances.

The study’s findings indicate that 69 percent of workers and 73 percent of retirees feel in control and/or happy about their financial situation. Ninety two percent of the workers and 91 precent of retirees say they can positively affect their financial situation, and 90 percent of workers and 88 percent of retirees say they can positively affect how their debt situation progresses.

The researchers noted that 83 percent of workers say they could pay for a financial emergency of $1,000 without having to borrow money from friends or family. However, the respondents acknowledged they could improve their financial planning. Slightly more than half — 54 percent of workers and 50 percent of retirees — say they a detailed financial plan, and just 27 percent of workers and 29 percent of retirees have a financial advisor.

The study’s findings indicated that most respondents acknowledged that they could improve their financial planning. Slightly more than half — 54 percent of workers and 50 percent of retirees note they have a detailed financial plan, and just 27 percent of workers and 29 percent of retirees have a financial advisor.

Social Security and Medicare Key to Retiree’s Financial Security

The Wells Fargo study noted that despite an increasing shift to a self-funded retirement, in the midst of the pandemic, nearly all workers and retirees believe that Social Security and Medicare play or will play a significant role in their retirement. According to the study, 71 percent of workers, 81 percent of those negatively impacted by COVID-19, and 85 percent of retirees say that COVID-19 reinforced how important Social Security and Medicare will be for their retirement. Sixty seven percent of workers say they have no idea what out-of-pocket healthcare costs will be in retirement, say the researchers.

The researchers say that workers expect that Social Security will make up approximately one-third of their monthly budget (30 percent median) in retirement. And even those high-net workers believe that Social Security and Medicare factor significantly into their retirement plans, expecting that the retirement program will cover 20 percent (median) of their monthly expenses.

The majority of the study’s respondents expressed concerns that the programs will not be available when they need them and worry that the government won’t protect them. Specifically, 76 percent of workers are concerned Social Security will be raided to pay down government debt and 72 percent of workers are afraid that Social Security won’t be available when they retire.

The Wells Fargo study also found that 90 percent of workers would feel betrayed if the money they paid into Social Security is lost and not available when they retire and that 45 percent of workers are optimistic that Congress will make changes to secure the future of Social Security.

Cicilline Hopes Dems Take Senate

Published in Pawtucket Times on November 9, 2020

On Saturday, November 7, at 11:45 a.m. (eastern Standard Time), as the Trump campaign called for legal challenges looming over ballot counting, CNBC projected Joe Biden to win the U.S. Election, making him president-elect. As the dust settles over this very divisive election, Pennsylvania’s 20 electoral votes propelled Biden over the 273 electoral votes needed to win.

With the Democrats now taking control of the White House and maintaining control of the House, even with a loss of seats, the battle for control of the Senate now turns to Georgia with one regular and one special election scheduled to fill a vacancy take place on January 5.

With garnering less than 50 percent of the vote, in accordance with Georgia law, GOP Sen. David Perdue and Democratic challenger Jon Ossoff meet again at a January 5 runoff election. Rev. Raphael Warnock, the democratic challenger, and governor-appointed Republican Sen. Kelly Loeffler, who replaced Sen. Johnny Isakson when he retired last year, battle in the Peach State for a Senate seat in special-election runoff.

Democrats now have a long-shot of taking control of the Senate with Kamala Harris being elected vice president and if they win the two Senate races in Georgia’s upcoming election. By winning the Senate, both parties will each have 50 seats, Harris tipping the balance of power to the Democrats.

McConnell, Oversees “Least Productive” Congress in its History

Rep. David Cicilline (D-RI) says that the Democratic-controlled House has had one of the most productive Congresses in the institution’s history. “We’ve passed more than 600 bills in the House, but there are more than 375 of them stuck on Mitch McConnell’s desk, many of them bipartisan,” notes Cicilline, who serves as Co-Chair of the House Democratic Policy and Communications Committee.

“Obviously, both Georgia senate races are hanging in balance and it’s important we win them. A Democratic majority in the Senate will allow for the passage of the “For the People” agenda which creates jobs, raises wages, lowers health care costs and increases access to affordable prescription drugs. These bills are good for Rhode Islanders and all Americans,” states Cicilline.

“I look foward to working with the Biden Administration to put together a robust agenda for the first 100 days and get to work passing bills that will help Rhode Island’s economy, workers and seniors,” adds Cicilline.

With the release of its 2020 Democracy Scorecard in September, Aaron Sherb, director of legislative affairs for the Washington, DC based Common Cause, documents how a Republican-controlled Senate has resulted in legislative gridlock. “What the 2020 Democracy Scorecard makes plain is the blatant disregard for democracy reforms in the Senate. “The House of Representatives passed nearly 10 democracy reform bills, often with bipartisan support, this session, but Majority Leader Mitch McConnell (R-KY) blocked debate and mark-ups on all of these bills and refused to allow a vote,” he said.

In fact, the Senate’s inaction has the 116^th Congress on tract to be the least productive in history, with just one percent of the bills becoming law,” charges Sherb. author of the 2020 Democracy Scorecard,

The National Committee to Preserve Social Security and Medicare (NCPSSM) strongly agrees with Sherb’s assessment of McConnell’s successful efforts to block Democratic and bipartisan-sponsored common-sense legislation critical to protecting the health and well-being of Americans. Seniors will not be better off with a GOP-controlled Senate, warns NCPSSM, calling for the Democrats to win the Georgia Senate special elections to take over the control of the Senate.

According to NCPSSM, a Washington, DC-based advocacy group with a mission to protect Social Security and Medicare, “Since 2019, the Democratic-controlled House has served as a firewall against Trump’s efforts to defund, cut and privatize Security and Medicare. But as long as Republicans control the Senate, legislation to protect and expand seniors’ earned benefits will remain in limbo. Under a Democratic majority, though, seniors would likely see real progress where their financial and health security are concerned.”

NCPSSM charges Senate majority leader McConnell, who gave himself the nickname, the “Grim Reaper,” has buried hundreds of House-passed bills during the 116^th Congress that would have benefitted America’s seniors. He even refused to take up last May’s House-passed COVID-passed relief bill, and the lower chambers recently passed COVID-19 legislation, as the nation’s public health officials battled the spread and spiking of the deadly virus.

McConnell also blocked consideration of H.R. 3, the Lower Drug Costs Now Act, which the House passed almost a year ago, says NCPSSM.

H.R. 3 would allow Medicare to negotiate prescription prices with Big Pharma, which would save the government and seniors nearly $350 billion in drug costs. The bill would also expand traditional Medicare by adding dental, vision, and hearing benefits.

NCPSSM says that the GOP Senate Leader will not even allow a bipartisan crafted bill, the S 2543, the “Prescription Drug Pricing Reduction Act, introduced by Senators Chuck Grassley (R-Iowa), and Ron Wyden (D-OR), to be considered on the Senate floor. According to the Congressional Budget Office, this legislation would save taxpayers $95 billion, reduce out-of-pocket spending by $72 billion and finally reduce premiums by $1 billion.

The eyes are now on the Supreme Court, where three Trump-appointed Justices will rule on legal issues coming before the nation’s highest court. “If the Supreme Court strikes down the Affordable Care Act, which strengthens Medicare’s finances and included enhanced benefits for seniors (not to mention protecting older patients with pre-existing conditions), a Democratic House and Senate could replace or revise it,” notes NCPSSM.

House Democrats are considering HR 860, The Social Security 2100 Act, to strengthen and expand Social Security. The landmark legislation, introduced by Rep. John Larson (D-CT), referred to the Subcommittee on Social Security would keep the program financially healthy through the end of the century, while boosting benefits for all retirees. NCPSSM notes that president-elect Joe Biden has incorporated many of the proposals in this bill into his own plan.

NCPSSM adds that a Democratic-controlled House and Senate could reduce the financial impact on COVID-19 on current and future retirees’ Social Security benefits. Under Democratic Senate leadership, notes the Washington, DC-based advocacy group, the upper chamber could work with the House to increase the tiny 1.3 percent cost-of-living adjustment (COLA) to 3 percent for 2021. which would be welcome news for older Americans who were laid off during the COVID-19 pandemic that sweep the nation, forcing many into early retirement

Finally, NCPSSM says that a Democratic-controlled House and Senate could prevent aging Baby Boomers born in 1960 (and possibly 1961, as well) from suffering a lifetime reduction in their future benefits caused by a COVID-related drop in average wages.

A Final Note: Let’s Bring Back House Aging Committee

During the last two Congresses, Cicilline introduced a resolution three times to re-establish a House Permanent Select Committee on Aging. Two of the times a GOP-controlled Congress blocked consideration. Democrat House efforts to impeach President Donald Trump and a continual battle over policy issues with the Trump Administration and the Republican-controlled Senate put Cicilline’s resolution on hold the third time.

The previous House Aging Committee was active from 1974 to 1993 (until it was disbanded because of budgetary issues) put the spot light on an array of senior issues including elder abuse, helped increase home care benefits for older adults and helped establish research and care centers for Alzheimer’s disease.

After introducing his resolution this Congress, Cicilline says that a reestablished House Aging Committee could initiate comprehensive studies on aging policy issues, funding priorities, and trends. Like its predecessor, its efforts would not be limited by narrow jurisdictional boundaries of the standing committee but broadly at targeted aging policy issues, he notes.

According to Cicilline, the House can easily create an ad hoc (temporary) select committee by approving a simple resolution that contains language establishing the committee—giving a purpose, defining membership, and detailing other aspects. Funding would be up to the Appropriations Committee. Salaries and expenses of standing committees, special and select, are authorized through the Legislative Branch Appropriations bill.

During the 117th Congress, as the House begins its debates on Social Security, Medicare and Medicaid, the Older Americans Act, and other issues of importance to older adults, it will be important to have a House Aging Committee that once again puts the spotlight and attention on America’s aging issues.

Opposition Builds Against Elimination of Social Security’s Payroll Tax

Published in the Pawtucket Times on September 28, 2020

With the looming 2020 presidential elections, the National Committee to Preserve Social Security and Medicare (NCPSSM) announces its first ever Presidential endorsement, throwing its support to the Joe Biden/Kamala Harris campaign. The Washington, DC-based aging advocacy group, founded by James Roosevelt, Jr., the son of President Franklin D. Roosevelt, who is credited with founding Social Security, fears for the retirement program’s future survival under a second Trump term. NCPSSM’s endorsement breaks the National Committee’s 38-year tradition of steering clear of Presidential campaigns in order to focus its resources on House and Senate races.

NCPSSM support of Biden follows the endorsements of other aging advocacy groups including AARP, Social Security Works, Alliance for Retired Americans, Medicare for All, American Federation of Government Employees and National Treasury Employees Union.

“During the past four years, we’ve seen this president pay lip service to seniors’ needs while actively undermining their best interests, the latest example being his reckless pledge to terminate the payroll taxes that fund Social Security and Medicare,” says NCPSSM’s president and CEO Max Richtman. “As the pandemic has worsened, we have seen an abject failure to protect nursing home residents and workers, who represent 40 percent of all COVID deaths. Never in our organization’s history have we seen such a consistent level of threats to the health and retirement security of America’s seniors,” he added, noting that the most effective way to protect the solvency of Social Security is to elect Joe Biden as president,” he said.

Adds, James Roosevelt, Jr., Vice-Chairman of the National Committee’s advisory board, “By enacting Social Security, my grandfather, President Franklin Roosevelt, gave workers the promise of dignity and financial security in retirement. Thirty years later, President Lyndon Johnson signed Medicare into law, providing older Americans with affordable, accessible health insurance. There’s a reason Social Security and Medicare have been around for 85 and 55 years, respectively. Americans value and depend on them. My father and grandfather would be outraged that President Trump and his allies want to dismantle both programs. I am 100 percent behind the National Committee’s decision to endorse Joe Biden, the candidate who can be trusted to protect seniors’ earned benefits from any attempts to undermine or privatize them.”

Trump’s Changing Policy Positions on Social Security

On Oct. 4, 2016, at vice presidential debate at Longwood University, Democratic vice-presidential nominee Tim Kaine noted that in 2000, Donald Trump wrote a chapter in a book, The America We Deserve, calling Social Security a” Ponzi scheme” [an investment fraud] and stating that “privatization [of the program] would be good for all of us. ”

One month before Trump formally announced his candidacy on June 16, 2015, with a campaign rally and speech at Trump Tower in New York City, he tweeted, “I am going to save Social Security without any cuts. I know where to get the money from. Nobody else does.”

As a presidential candidate, Trump continued calling for protecting Social Security, long regarded as one of the most successful and popular social programs ever enacted by Congress. During a June political rally in 2016, Trump claimed, “We’re going to save your Social Security without killing it like so many people want to do” and throughout the 2016 presidential campaign repeatedly promised “not to touch” seniors’ earned benefits and to “protect your Social Security and your Medicare.”

Once in the Oval Office, Trump’s views changed. Congress was forced to block his proposed budget cuts and rule changes that would hurt Social Security beneficiaries, says Richtman.

“Trump has betrayed older Americans through his bungled response to the COVID pandemic and by blatantly breaking his promises to protect senior’s cherished social insurance programs. He has proposed more than $1 trillion in cuts to Social Security, Medicare and Medicaid. He has vowed to eliminate the payroll taxes that fund seniors’ retirement and health benefits if re-elected to a second term. He has urged the Supreme Court to strike down the Affordable Care Act, which improved Medicare benefits and solvency. In short, the President has listened to advisors who want to dismantle the country’s most effective social safety net programs” says NCPSSM’s top official.

A Stark Warning

On August 8, Trump has signed an Executive Order, Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster, to authorize a payroll tax holiday/deferral to give American taxpayers extra cash as they deal with the coronavirus pandemic. The president’s action allows employers to stop deducting the 6.2 percent employee payroll contribution toward Social Security for the rest of the year.

An Aug. 28 IRS memo noted that employers who participate in the payroll tax holiday will then have to pay back the taxes starting in 2021. Simply put, more money will take out paychecks from Jan. 1 to April 30 in 2021 to repay the taxes owed.

Richtman warns, don’t count on payroll tax forgiveness. “Unless Congress passes legislation to address this, the workers will ow every cent of that payroll tax deferral in 2021, and employers would have to deduct more from their paychecks starting January to repay it,” her says.

NCPSSM, Democratic lawmakers, and Social Security advocacy groups don’t see Trump’s elimination of the Social Security payroll taxes as an effective economic stimulus especially to unemployed workers. This action could effectively defund the Social Security and Medicare programs could ultimately bankrupt these programs.

In the letter released on Sept. 23 , Nancy A. LeaMond, AARP’s Executive Vice President and Chief Advocacy and Engagement Officer said “As AARP raised in letters to Congress back in March and President Trump and Treasury Secretary Mnuchin in August, we believe suspending, reducing, or eliminating contributions to Social Security will interfere with the program’s long-term funding stream… This deferral, along with the President’s recent statements on the permanent elimination of the Social Security payroll tax contribution, are engendering uncertainty among older Americans and the general public about Social Security and its ability to pay promised benefits. As such, AARP supports the resolution of Congressional disapproval.”

Trump counters NCPSSM, AARP and others condemning his Executive Order. He claims that eliminating the Social Security tax would not impact the solvency of Social Security, because the money would be shifted from the government’s general fund. Both continuing his payroll tax cut and shifting funds would require Congressional action. That, also, would require an act of Congress.

With this first time political endorsement, NCPSSM hopes to see a Democratic administration take over the White House to strengthen and expand Social Security, not weaken it by eliminating the program’s payroll taxes. “After nearly four decades of fighting to protect American seniors, the National Committee has determined that many older Americans cannot afford – let alone survive – another four years of President Trump. By endorsing Joe Biden and Kamala Harris today, we will work tirelessly to help voters of all ages understand that Trump’s promises are empty. He offers seniors a one-way ticket to nowhere. Americans deserve a President who will protect and strengthen the federal government’s commitment to older Americans.”

This article was updated on Sept. 24.