|Source: The Economist-|
This emphasizes the great need for improving the skills of workers, especially in America which ranks 39th in the world in education. That 1 in 5 Americans lives in poverty is already unacceptable. The more educated your population is the better your country will be when it comes to economic freedom. The more likely they'll be able to save to the point that perhaps they don't even need Social Security and Medicare when they retire. Because they either have a well-funded pension plan, or a private retirement account that provides them the income that they need to retire and live well. Which would even include blue-collar workers because now they'll have more skills and be able to move into management in their current company.. Or perhaps start their own company. Instead of being stuck with the same blue-collar job for most of their career that pays around 40-50 thousand-dollars a year and struggle just to pay for their cost of living. Let alone able to plan ahead for their own retirement.
Our aging population means current and future workers are going to have to work longer and be more productive. They need to put more money away for their own retirements and be less dependent on the public safety net to provide them needed income when they retire. Because Congress has very little political interest to save the Social Security and Medicare system. And Congress tends to only go big when it comes to reform when it benefits both parties politically. And most of the solutions that would save Social Security and Medicare are unpopular with either one party or the other. And I don't like making this assumption, but if you were to assume that Social Security and Medicare were to go broke, unless they're both saved at the last minute, that means more Americans need to do more thinking and investing on their own. And what Congress along with the states can do which would be popular is to expand education and job training for our low and middle-skilled workers. So they can get themselves the skills that they need to get a good job.
Private retirement accounts are an attractive policy option that encourages people to put money away, matched by their employers, away for savings and retirement. This allows people to finance their own retirements bringing down government costs. This is what is called Social Security Plus. The core of Social Security is still intact, but lower the payroll tax for low-income workers who get hammered by it. Raise it on the top-level workers and allow everyone to collect current Social Security when they retire. But also be able to have their private retirement account. Again money that they put away on their own that is tax free that is matched by their employers that is also tax free. Because the current economy and retirement system simply doesn't work for enough people. Unless you're currently wealthy or have a good government job. Which means you need more economic freedom in America so more Americans can benefit and live comfortably when and if they actually do retire.