Retirement Policy: What to Expect in 2024 and Beyond
“But, it is something that we will see being discussed at a higher level, and specifically among a cadre of bipartisan senators eager to find areas of agreement, just given what the actuaries have said about the need to take action in just eight or nine years,” Flitton added. “We’ve seen some discussion of Social Security already it in the Republican primary debates, for example, with Nikki Haley floating ideas about the need to control spending on entitlements.”
What is clear at this point, Flitton said, is that the trajectory of significantly higher costs across Social Security and Medicare is real, and the truth is that actions taken sooner could reduce the overall amount of pain.
DC Plan Pressure Valve
As Flitton observed, the outlook for Social Security may be worrying, but there are other reasons for optimism about the future of retirement in the United States — including numerous key reforms in the two Secure Acts. In a sense, she agreed, the defined contribution plan system is one of the few effective pressure valves that can help Americans respond to fears about Social Security.
Simply put, getting more younger Americans and underserved groups into the defined contribution plan system should help them begin to accumulate assets for retirement. It obviously won’t be ideal should younger people see their future Social Security benefits reduced, but they can take advantage of the power of long-term compounding within affordably priced defined contribution plans to make up some of the slack.
“Something else to be said is that former Sen. Rob Portman and outgoing Sen. Ben Cardin deserve a great deal of credit and appreciation,” Flitton said. “They did so much work behind the scenes over the years, and they were a big part of the bipartisanship we have seen.”
Fiduciary Rule Will Be Another Focus
In terms of other priorities for 2024, Flitton said another important one to mention is the Department of Labor’s fiduciary rule proposal. She is concerned with the proposal’s “overly broad and overly corrective scope,” which she expects to result in more harm than benefits to retirement investors.
She said she was encouraged to see a degree of bipartisan opposition to the current proposal at a recent congressional hearing. Also encouraging is that many members of the respective committees of jurisdiction in the House and Senate seem to already have a good grounding in the basics of this topic.
“The members at the hearing didn’t need a lot of reeducation on this debate from the industry, which is great,” Flitton said. “They were asking important questions, and we heard well-thought-out concerns from both the Republican and Democratic sides. Obviously Republicans are still more critical to the rule proposal, but there are Dems who are very concerned with potential unintended consequences, too.”
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