Meir Statman’s Proposal for Mandatory US Retirement Savings (Podcast)
The United States is in the throes of a retirement crisis, a problem that CFA Institute authors and others have discussed in depth over the past few months. Meir Statman, Glenn Klimek Professor of Finance at Santa Clara University, argues that a long-term solution might be to require, instead of recommend, that US employees contribute to personal retirement accounts. As part of our ongoing FAJ author interview series, Rodney Sullivan, CFA, talked to Statman for further insight into his proposal, which was detailed in “Mandatory Retirement Savings,” published in the May/June 2013 issue of the Financial Analysts Journal.
Statman says that we have two populations in the United States — “one that has more money than it needs, and one that has way less than it needs for decent retirement.” He notes that “attempts to nudge people toward saving have been very successful, but not successful enough” and proposes mandatory retirement savings accounts to which US employees would contribute a certain percentage of their income. In the interview, Statman goes on to discuss cultural norms about retirement in other countries, as well as the consequences of poor retirement planning for the entire US economy.
You can listen to the full interview above or download the MP3. You may also want to read a discussion of financial paternalism in light of Statman’s proposal, written by Dennis McLeavey, CFA.
CFA Institute members can access the full FAJ article by Statman on the CFA Publications website.
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.