Smart SpendingSmart Spending

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.

By MSN Money Partner Nov 6, 2012 12:51PM

This post comes from Emily Brandon at partner site U.S. News & World Report.

 

U.S. News & World Report logoThere 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.

 

People putting political symbols in box Comstock Images/Getty ImagesHere'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.

 

401k's

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."

 

Retirement saving

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.

Politicized investing

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."

 

Social Security

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.

 

Medicare

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:

 

24Comments
Nov 6, 2012 5:52PM
avatar

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...

Nov 6, 2012 5:56PM
avatar
This article just illustrates the point that  many people are ignorant of the basics of economics.
The public schools have failed miserably in educating the masses and the colleges still refuse to make Economics 101 a basic requirement for graduation.
Nov 6, 2012 6:13PM
avatar
And America will continue to falter until Americans decide to take responsibility for themselves and make the decision that they no longer want to be a burden on future generations. It really is that simple. SS was never intended to be a sole source funding for a 30 year retirement. When they created SS, it should have been tied to life expectancy and then we wouldn't have some of these issues. Instead, it is having to fund longer and longer retirements well beyond design. Add to that the scope of who receives SS benefits has also grown from the original plan. It is like every other government program. It has such great intentions and sounds so noble but then it grows into a fat pig and no one is willing to fix it for fear of not getting reelected. It has been the case for every single government entitlement program and it will continue to be like that for every future entitlement program such as Obamacare. And anyone that thinks it will be different this time is just living in fantasy land.
Nov 6, 2012 6:04PM
avatar
All of these posts would have infinitely more weight, if people did some homework and used facts instead of fear and loathing to make comments.
avatar

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.

Nov 6, 2012 7:18PM
avatar
What happened to the money we baby boomers put into social security, now they act like we are putting a drag on the system, but we already paid. Nobody should be having to pay for us.
Nov 6, 2012 7:16PM
avatar
A republican will smile in yourt face and cut your benefits.. In a heartbeat ... There are no more moderates in the repyblican party any more. Thats why i split my ticket . There are some at the state level , but not many..
Nov 6, 2012 6:10PM
avatar
Wait we had a surplus? Or you must mean when Clinton and Newt borrowed from SS to say they balanced the budget. But you do know that are national debt didn't go down, so where was the surplus again?

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!

Nov 6, 2012 7:04PM
avatar
NEVER FORGET- Republicans gave America the homeless. They do not care about seniors in retirement.  That is what these so called Christians think of their fellow man!
Nov 6, 2012 5:45PM
avatar
The borrowing by all presidents on Social Security is a travesty....and now in the Obama Health care act....buried in all those thousands of pages....is the right of the government to take all US citizens pensions, IRA's-even roths, 401k's and put them into one big pot for fair redistribution and to pay off the deficit....this has already been done in Spain, France and Chavez did it to his people. So this is what the Dems call pension reform....they are currently borrowing from the Federal Employee's pension plan....Google both of these items and the truth will pop up right in front of ur face.....the more u know the more u can protect urself from these thiefs. Google 401k grab by the government or similar heading....it came out on Rueters....so pretty real! Oh and by the way half of Obama's staff is from Goldman Sach's so as far as Wall Street goes....fools be fooled.
Nov 6, 2012 6:03PM
avatar
That's why working class republicans are morons.    Cut their own throat and work against their own economic self advantage to the benefit of their overlords, the rich and powerful.   Morons. 
Nov 6, 2012 5:28PM
avatar
If they want to mess with retirement benfits and make people pay their own way? then the Republicans should not block wage increases and damn SS all the time. Maybe if the CEO's etc would or could live on a couple of million then the workers who do the grunt work and not play golf and have 2PM martinis could make enough to invest and save?Plus govt has to get out of the inflation causing practices such as funny money,farm subsidies,wall st meddling and bailouts of bankrupt companys. If all the money Obama put into solar was put back into SS and money borrowed from pension funds [CSRS] it would have been a worthy investment with real results.
Nov 6, 2012 5:53PM
avatar
Republicans want to reneg on promises made to our seniors , so they can fight more wars , and line the pockets of oil companies . It's O'Bamas' fault that this country is broke . What a crock of .... ! 8 years of Bush and we went from a surplus to a financial meltdown of global proportions . If it wasn't for O'Bama we would have gone the way of the USSR . And Mitt Bush is going to save us ? Repubs are dumber than a bag of hammers . At least the ones in the 99% are . Mitt knows exactly what he doing . Lie and say anything he can to decieve his way into office , and then say ... oh by the way I LIED .
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More