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How the new Treasury Secretary Janet Yellen will affect future retirement

Janet Yellen is a formidable figure in American economics. And as the newly appointed Treasury Secretary, she is expected to help transform retirement security as well.

During her interview in position, Financial leader He said changes need to be made for future retirees.When a senator asked her about her potential role in retirement security as part of her nomination hearing, she Mentioned The various proposals that President Biden endorsed in the campaign and what she will do to help.

Yellen, who chaired the Federal Reserve from 2014 to 2018, offered tax incentives to SMEs wishing to start a retirement program, strengthened their social security system, and worked without a 401 (k) plan. Balance an “automatic 401 (k)” with tax incentives for all income levels.

“There are many possible options for middle-income households to make their retirement pay more generous,” she said. Yellen added that he is studying a myriad of ways to solve growing problems.

to see:Yellen defends Biden’s economic plan at confirmation hearing

“She believes she can play a very important role in expanding opportunities for American workers and retirees in a variety of ways,” said the Insured Retirement Institute, an industry association that defends the retirement industry. Said Paul Richman, Supreme Government and Political Officer. Her role as Treasury Secretary directly and indirectly influences retirement savings.

According to Richman, there are already four bills dedicated to retirement security through Congress that could help middle-class families make nest eggs with some ability. Eugene Steuerle, co-founder of the Independent Urban-Brookings Tax Policy Center, said the new Treasury Secretary has the power and ability to address and balance these numerous concerns. Governments can no longer handle problems one at a time.

“Janet Yellen has the highest qualifications to recognize the need to address these issues at the same time, which will be a dramatic change from our way of doing things,” he said. “She is someone who has the ability to deal with problems at that level, and my fear of the economy as a whole is our long-term in terms of growing and making money for the biggest people without doing it. Needs will continue to fall on the roadside. ”

As head of the Treasury Department overseeing the Internal Revenue Service, there are many ways she can investigate and encourage the government to try to change the way Americans save money for their future. Tax incentives and taxation methods on accounts are two main factors in retirement planning. This is one of the reasons why people tend to invest in certain types of accounts, such as 401 (k) plans rather than individuals. Retirement account (IRA) or loss account rather than traditional account. There are also tax-friendly employer-sponsored retirement programs and tax credits that can be investigated further.

Social security plan

Yellen is also deeply involved in what happens to social security. Its fate is now at a loss as Congress is figuring out how to solve the bankruptcy problem. If the government does nothing, the program’s trust fund will be exhausted by 2035 (Or earlier (Thanks to the pandemic), at that time Americans would only receive about 80% of the profits they owe.

“Since 1983, social security reform has not been a short-term priority, and the day of calculation has finally arrived,” Steware said. Medicare also needs urgent attention. Yellen said in an interview with the Senate that the government needs to find ways to provide health care in a cost-effective way.

reference: Yellen says the smartest thing to do now is to “act big” to help Americans struggling.

Yellen also addressed social security concerns in her written response to Senator’s question. “Having a strong social security program is essential to ensure the safe retirement of all Americans, especially our most vulnerable,” Yellen said. She referred to Biden’s proposal — including taxing workers who earn more than $ 400,000 and increasing the interests of survivors, low-income workers, and older beneficiaries.

Retirement security seemed to be a priority for Yellen, but there are other pressing issues. Pandemic resultsSaid John Scott, director of the Pew Charitable Trust’s Retirement Savings Project. But given that so many Americans lost jobs and wages, and had to stop or use their retirement savings, that also impacts future retirement safety. .. “Some of these immediate steps will also have an indirect or spillover effect on retirement safety,” Scott said.

Yellen isn’t directly involved in all conversations about retirement proposals, given the long list of Treasury Secretaries, but he will be the one who “sets the table for discussion.” Said. She also has experience in government and cooperation with members of both parties and will benefit her in this role.

“Especially the Treasury Secretary has received a lot of attention for their decisions,” Scott said. “I’m talking outside of retirement coverage, but what they say can affect the stock market. People like her generally retire on certain initiatives, as well as in general. Prioritize policy and I think it could have a big impact in the future. “

How the new Treasury Secretary Janet Yellen will affect future retirement How the new Treasury Secretary Janet Yellen will affect future retirement

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