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Idea of the Day: How a SAFE Retirement Plan Would Improve Our Private-Sector Retirement System

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The personal retirement-savings plans that most Americans use, such as 401(k)s and Individual Retirement Accounts, or IRAs, are unnecessarily costly and needlessly risky. But instituting another kind of retirement plan that combines the best elements of both defined-contribution and defined-benefit plans—such as the Center for American Progress’s proposed Secure, Accessible, Flexible, and Efficient, or SAFE, Retirement Plan, or the related USA Retirement Funds proposal from Sen. Tom Harkin (D-IA)—could provide a more secure retirement at a far lower cost, according to a new analysis by the Center for American Progress.

These two proposals, also known as collective defined-contribution plans, improve upon the 401(k) model in a number of ways. As described in greater detail in a fall 2012 report, titled “Making Saving for Retirement Easier, Cheaper, and More Secure,” CAP’s SAFE Retirement Plan combines elements of a traditional pension—including regular lifetime payments in retirement, professional management, and pooled investing—with elements of a 401(k), such as predictable costs for employers and portability for workers.

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To speak with our experts on this topic, please contact:

Print: Allison Preiss (economy, education, poverty)
202.478.6331 or apreiss@americanprogress.org

Print: Tom Caiazza (foreign policy, health care, energy and environment, LGBT issues, gun-violence prevention)
202.481.7141 or tcaiazza@americanprogress.org

Print: Chelsea Kiene (women's issues, Legal Progress, Half in Ten Education Fund)
202.478.5328 or ckiene@americanprogress.org

Spanish-language and ethnic media: Tanya Arditi (immigration, race and ethnicity)
202.741.6258 or tarditi@americanprogress.org

TV: Rachel Rosen
202.483.2675 or rrosen@americanprogress.org

Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org

 

This is part of a regular column: Idea of the Day

For more from the same column, click here