U.S. Senator Mike Enzi, R-Wyo., called out the U.S. government today for its fiscal irresponsibility by not relying on investment funds to help cover the cost of social security and retirement benefits for federal employees.
Speaking at a Senate Finance Committee hearing today, Enzi noted that while private businesses are expected to invest in order to help fund their retirement benefits for employees, the federal government has failed to take the same steps.
“We don’t have any investment funds for military retirees,” Enzi said. “We don’t have any investment funds for federal retirees. We don’t have any investment funds for postal workers — it is supposed to be there but it isn’t. And we don’t have any real investment funds for Social Security.”
According to the latest Social Security Trustee’s report, the Social Security program’s combined trust funds are expected to become depleted by 2035.
“That means that in sixteen years’ time, when today’s 46 year olds first become eligible for retirement benefits, the program will only be able to pay roughly 80 percent of scheduled benefits, according to the trustees,” Enzi said.
Joni Tibbetts, vice president of the retirement and investors services at Principal Financial Group, noted the importance of financial literacy when it comes to individuals understanding how decreased social security benefits could affect their retirement plans.
“We do find that when participants do a check up to see how much of their income will be replaced by Social Security and also their retirement plan have better wellness scores. And what I mean by a wellness score is how successful are they in terms of being able to replace that pre-retirement income. Being able to provide these tools is really the factor from an educational perspective to help participants as they plan, understanding what Social Security is going to be able to provide, what other saving vehicles and what’s replaced through their retirement plans.”
Earlier this month, Enzi gave a speech on the Social Security Program’s unsustainable fiscal path.