3 Steps to Shore Up Retirement Security: Putnam CEO Bob Reynolds

On the following page, read Reynolds' thoughts on three steps that could shore up retirement security.

Noting that "strengthening America's retirement system should have been a higher priority for years before 76 million baby boomers began to retire," Putnam CEO Bob Reynolds asserts in a blog post that nearly all American workers can improve their retirement preparedness with these three steps:

1. Full-auto approach for all workplace savings. "Make the best practices endorsed by the Pension Protection Act of 2006 the new norm for all workplace savings plans," Reynolds advises. A full-auto approach would mean all automatic features for all workplace savings plans, including automatic enrollment, re-enrollment, escalation and default to qualified funds.
2. Access to workplace savings for all workers. "Any worker paying FICA taxes should have access to a retirement savings plan at work," Reynolds writes. "Let's support the Auto-IRA, a bipartisan idea that was reintroduced into Congress this year, requiring all employers to offer, at a minimum, a payroll-deduction IRA with an opt-out provision for workers."
3. Raise the bar on deferral rates. The Lifetime Income Score survey found that the most successful savers, meaning the people who are on track to replace 100% or more of their current income in retirement, are those who actively participate in a savings plan at work and save 10% or more of their salary.

Sluggish wage growth, Reynolds acknowledges, deters workers from saving more. But he believes that workers should be encouraged to set realistic expectations about retirement — and auto-escalation can help them achieve their retirement savings goals.

"The infrastructure that exists today represents a combination of ideas from the retirement industry, private individuals, advocates, and public policymakers. It is a joint effort like this — in a coordinated, full-court press — that is needed to take America's retirement savings system to the next level," Reynolds concludes.

Read 7 Things Your Clients Need to Know About Retirement: Harold Evensky at ThinkAdvisor.