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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
Presidential Candidates' Retirement Reform Plans
Presidential candidates Barack Obama and John McCain have recently discussed their plans to reform the Social Security system. NCPA has summarized their proposals. Please click here to view our updated table.
Social Security and Medicare Projections: 2008
The 2008 Social Security and Medicare Trustees Reports show the combined unfunded liability of these two programs has reached $101.7 trillion in today's dollars! That is more than seven times the size of the U.S. economy and 10 times the size of the outstanding national debt. The unfunded liability is the difference between the benefits that have been promised to retirees and what will be collected in dedicated taxes and Medicare premiums. Last year alone, the size of the debt rose by $11.5 trillion. If no other reform is enacted, this funding gap can only be closed in future years by substantial tax increases, large benefit cuts or both.
Read: Social Security and Medicare Projections: 2008
401(k) Loans = Retirement Insecurity
The popularity of 401(k) plans has grown in recent years. According to the Employee Benefits Research Institute, almost two-thirds of employers offer such plans and millions of employees now contribute to them. These defined contribution plans allow workers to set aside part of their earnings in tax-deferred retirement accounts that are invested in stock and bond funds. A worker can begin to withdraw funds from the account without penalty at age 59 and one-half. All contributions, as well as accumulated dividends and interest, are subject to income tax when the funds are withdrawn.
Read: 401(k) Loans = Retirement Insecurity