Robert L. Reynolds’s new book, From Here to Security: How Workplace Savings Can Keep America's Promise is the one to beat this year for intellectual rigor and zeal for social justice.
“People fear poverty or severe financial stress in old age more than they fear death,’’ Reynolds writes, so he urges that Social Security be made solvent for future generations and that all Americans become entitled to a workplace savings plan for retirement.
He is the president and CEO of Putnam Investments, Boston, and of Great-West Financial, Denver, which includes Empower Retirement, the country’s second-largest provider of retirement services to more than 8 million people.
Reynolds, who answered e-mail questions from Financial Advisor, begins his book by saying he feels a “moral obligation to spread the word about reforms and best practices that can inoculate our country against the risk of a very predictable rise in elderly poverty.’’
Among the statistics he offers to bolster his arguments, Reynolds says 50 percent of those working at small companies, or about 50 million people, have no savings plan options, and 21 million households have no savings plan. He says that by 2020, about 60 million workers, or 40 percent of the workforce, will be in the gig economy -- freelance, contingent and temporary workers -- which currently has no savings plans. For 60 percent of current retirees, most their income comes from Social Security.
“We should back up a solvent Social Security with close to universal access to workplace private savings,” he says in his book. “While we preserve tax deferrals for savings of 401(k) and IRAs, and others, we extend coverage to all working Americans through a payroll deduction Automatic IRA.’’
Before those goals can be accomplished, Reynolds adds, disaffected Americans will have to believe in their government’s ability to pass fair and sensible legislation.
“(We need to) restore our faith in our ability to govern ourselves, and by increasing our savings rate and channeling savings to capital markets, (we will) help America’s economy to grow far more robustly.’’
When we asked Reynolds if he is optimistic that the current Congress can help Americans achieve a secure retirement, he called himself “a skeptical optimist.”
“I do believe that Congress has the power to significantly enhance Americans’ retirement savings options, but I also know that getting significant legislation passed has become very tough, politically. One piece of good news is that more and more members of Congress are recognizing the importance of retirement savings -- and their connection to fostering strong capital markets and faster economic growth.