Democrats, Republicans differ on retirement
Members of the two major U.S. political parties have distinctly different visions for 401k's, Social Security and Medicare.
This post comes from Emily Brandon at partner site U.S. News & World Report.
There are many clear differences between Republicans and Democrats this election season, one of which is their feelings about retirement. In a variety of recent surveys, members of each political party expressed contrasting views about how retirement should be paid for and the future of entitlements.
Here's a look at how Democrats and Republicans differ in their perceptions of retirement:
Responsibility for funding retirement
Republicans (56%) are more likely than Democrats (42%) to say the responsibility for retirement finances rests largely with individuals, according to a recent Wells Fargo and Harris Interactive survey of 1,000 middle-class Americans. Democrats were more likely than Republicans to report that employers and the government should also play a role in funding retirement.
"Most middle-class Americans are waking up to the fact that I own and control and am responsible for my own retirement," says Joseph Ready, the executive vice president of Wells Fargo Institutional Retirement and Trust.
Democrats are more likely than Republicans to think employers should play a bigger role in helping employees save and invest for retirement. More Democrats (86%) than Republicans (67%) say employers should provide personal advice to help employees manage their retirement savings.
Democrats are also more likely to say companies should automatically enroll employees in 401k plans (77%) and automatically increase contribution rates by 1% each year (72%) than Republicans (55% and 56%, respectively), according to the Wells Fargo survey.
"We see a generalization that these plans are confusing, but it sure would be nice to get some help," says Ready. "What's really great about these auto features is people can opt out of them."
More Republicans (79%) between ages 55 and 65 say they started saving for retirement before age 50 than Democrats (69%), Independents (71%) or people without a political party preference (67%), according to an Allianz Life survey of 1,209 people approaching retirement.
The survey also found that among people within 10 years of age 65, 12% of Republicans, 19% of Democrats, 19% of Independents and 23% of those with no party preference say they have not yet begun saving for retirement. The most popular decade to begin saving for retirement was the 30s, when 33% of Republicans and 28% of Democrats say they started to build a nest egg.
The Allianz Life survey also found that 57% of the Republicans surveyed say they will change their retirement saving strategy if President Barack Obama is re-elected. The majority of Democrats, Independents and people with no political preference said they would not change their retirement investment strategy based on the election results.
"Politics is so polarizing right now," says Katie Libbe, the vice president of Consumer Insights for Allianz Life. "Who knows if they would really change their strategy, but they said they would."
An overwhelming majority of Americans (87%) of all political persuasions agree that Social Security has been good for the country, according to a 2011 Pew Research Center survey of 1,502 adults. Most Americans also say preventing future cuts to the program is more important than avoiding increases in Social Security taxes for workers and employers (56% to 33%).
However, a greater proportion of Democrats (67%) prioritize avoiding benefit cuts than Independents (55%) and Republicans (49%). There is also a divide within the Republican Party, with preserving benefits being much more important to low-income Republicans than affluent Republicans. Some 63% of Republicans and Republican-leaning Independents with family incomes of $75,000 or more say it is more important to take steps to reduce the budget deficit than to preserve entitlements. The majority of middle-income Republicans (53%) and Republicans with incomes of $30,000 or less (62%) prioritize maintaining entitlements over deficit reduction (53%).
Democrats do not have a divide among income lines.
Majorities of Republicans (53%), Democrats (72%) and Independents (58%) say people on Medicare already pay enough of the cost for their health care, the Pew Research Center found.
But 41% of Republicans say recipients should pay more for Medicare benefits, compared with 32% of Independents and 23% of Democrats. Young and more affluent Republicans are more likely than Republicans overall to want to pass more of Medicare's costs on to retirees.
In neither party does the majority of those surveyed favor changing Medicare into a program that offers future participants credits or vouchers toward purchasing private health insurance coverage. But Republicans (46%) are much more likely to be in favor of this change than Democrats (28%) or Independents (34%).
Potential entitlement changes
The only Social Security tweak that gets support from a majority of Democrats (73%), Republicans (54%) and Independents (71%) is increasing the payroll tax cap. (In 2012, workers currently pay into the Social Security system only on earned income up to $110,100.)
Small majorities of Democrats and Independents, but not Republicans, support reducing Social Security benefits for high-income seniors, the Pew Research Center found. A majority of both parties disapprove of raising the retirement age at which people can claim Social Security benefits, but Republicans (41%) are more likely to be in favor of an older retirement age than Democrats (31%).
More on U.S. News & World Report and MSN Money:
- 6 ways Social Security will change in 2013
- Best places to retire for under $40,000
- How to help your children without sacrificing your retirement
- Smart Spending on the go: Get our app for Android or iPhone
- Presidential campaign ads set record
- Retirement number: Is 8 enough?
How about Federal retirement insurance or not allowing corporate retirement obligations to be dischargable in bankruptcy? Kodak, all the major airlines, etc... - the used up workers get the shaft, but no big deal because the profiteers that raided the retirement accounts and paid them out in dividends and outrageous upper management benefit packages are mostly republicans...
i might be possible for some to put away for retirement but when the Wall Street shirts keep crashing the economy every 4 to 8 years then it makes it kind of hard. The Wells Fargo retirement fund president makes you think everyone can do it and retire easily. I would like to see all those bank tellers retire on what they are paid. How about all the corporations who went bankrupt in the last 20 years and let the gov't take over their worker's retirement, incidently the gov't pays half.
Just ask Mitt Romney who with his partners in his blind trust during the auto bailout and took over GM's parts distributor Philco, closed 25 of 29 plants, laid off all the union workers and refused to pay their retirement and medical. Mitt you are gonna get caught on this one. When a guy works all his life and expects a nice retirement only to have a corporate raider like Mitt Romney swoop in and steal all that he had worked for. Then the Republicans will say sorry, your on your own.
I find it funny that idiots say that the Repubs want to reneg on promises made, but if we go down the path we are going down now, there is ZERO chance of the Government being able to make good on the promises. So the people that want NO chance to the current system are the ones that want to break the Government promises.
As for PBO, lets all vote for the new normal 7.9% unemployment, the 18 million new people on welfare, the 3.6 new people on SS disability, the 10 million new people on welfare, and the 2.3 trillion dollar obamacare, which when it was passed was 800 billion.
This is a wonderful record to vote on!
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