Today's Federal Register contains an announcement that Social Security is planning to form a Financial Literacy Research Consortium (FLRC) with the idea of encouraging saving for retirement. According to the announcement:
The Financial Literacy Research Consortium (FLRC) will be an innovative, non-partisan multidisciplinary research and development (R&D)initiative to develop products to better inform the public about key financial literacy topics related to retirement savings and planning. We are interested in developing products--such as Internet tools as well as print materials--that help foster retirement and other savings strategies at all stages of the life cycle.Encouraging people to save for retirement is certainly a good thing. However, I see little hope that the Social Security Administration can do anything to significantly encourage saving. This seems like a waste of money at a time when Social Security's budget is so tight that the agency has enormous backlogs and cannot answer its telephones. It is also a distraction from Social Security's core mission. This sounds like a Congressional earmark. Is it?
8 comments:
As far as I'm aware, this is an SSA initiative and there's no special funding for it.
If no special funding, then I suggest they dump this and get busy clearing some hearings. The old DM is NOT AMUSED.
So I finally get it: the only initiatives at SSA that meets with your approval are ones that potentially put more money in the pockets of disability representatives!
I think financial literacy is a good thing. Some self-employed people might learn the consequences of consistently underreporting income. Some folks might learn that working "under the table" or "for cash" has consequences -- no QC's. People might learn how one gains insured status for disability payments before they actually need it.
The American public has a right to know not only how the Social Security programs work, but more importantly, how they are only a part of what needs to be a larger personal plan for financial security in the event of retirement or disability.
Somebody better do it.
Simply knowing about quarters of coverage and insured status isn't going to change behavior. Especially not in this economic environment when the people who most need to save are unable to because they can't meet their daily expenses. A waste of time.
This is left over from the Bush administration's efforts to weaken Social Security and replace it with privately financed retirement. The Commissioner is still committed to it and tries to make it sound like it is educational, but it focuses on promoting the importance of self-funding your own retirement based on the assumption that Social Security won't be there for you. The program is intended to undermine confidence in Social Security and is part of an overall right wing strategy to shape public opinion in favor of private financing of retirement.
There's nothing new or "left over from the Bush administration" about this approach...in fact, reference to these same concepts go back to the 1930's.
SSA's website has some interesting background on the origins of the Three-Legged Stool metaphor for Social Security.
http://www.ssa.gov/history/stool.html
The biggest change today is the loss of the private pension benefit that many workers enjoyed back then. For most folks now, the stool now has only two legs -- Social Security and personal savings.
What is the role of our schools? I think this varies greatly by district. Before I retired from SSA I was only asked once for a speaker for a local high school. The students wanted to know how retired people lived before social security - it turned out to be a good history lesson about our evolution from an agricultural to industrial to service economy and how multigenerational households took care of each other and later how the value of the land was/is often the farmer's IRA. I know that SSA produces materials for teachers to use (or at least there used to be a teacher's kit). The schools need to be teaching personal finances including use of credit, saving for "rainy days" and retirement planning.
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