Financial Literacy and the Retirement Crisis for Underserved Communities
Building the financial foundation for a secure retirement is particularly hard for people in underserved communities and with lower incomes. It’s also tough for public employees who can’t get all of the components of the classic “three-legged stool” of retirement: personal savings, Social Security, and a pension.
At a recent lunch briefing hosted by the Alliance for Prosperity and a Secure Retirement (APSR) and Progressive Policy Institute (PPI), panelists talked about those underserved communities, the difficulties they face, and potential solutions.
The event was summarized by the hosts as a panel that “discussed the challenges that prevent underserved communities from building wealth, new financial tools that have been successful in empowering individuals to make informed financial decisions, and policy recommendations to promote retirement security in the United States.”
It’s harder for some public employees to build secure retirements because their line of work can impact just how long they are able to be active in their respective fields. Many of them find their working years, typically when they’d be trying to save for retirement, are often shorter, said APSR President Tim Hill, former firefighter, and director of the International Association of Fire Fighters (IAFF).
“Police officers and firefighters in particular are what’s known in the industry forum as professional industrial athletes. And no one questions that professional athletes, because of their bodies and injuries, need to retire earlier than the general population,” he said. “So, we have a shorter time to accumulate assets and then a longer threshold that those assets have to sustain us in life. So, the health of those funds is of particular importance to our members.”
What’s more, in many parts of the country, firefighters, police and other public employees aren’t eligible for Social Security, which makes their public pensions that much more critical to their retirement security, he said. “That’s a good reason to keep politics and other non-financial factors out of investment decisions.”
That’s what APSR is working on, Hill emphasized.
“What we’re really focused on, with retirement security in particular, is trying to tamp down the current efforts to interfere with pension trustees, fiduciary responsibilities, and the fiduciary responsibilities of those systems.”
“We’re trying to stop efforts to tell pension funds and pension trustees ‘You cannot buy this company, you cannot invest in that company, you can’t invest in this strategy.’ Or ‘You can’t carry out that strategy anymore,’ because of those politicians’ focus on political winds.
“What the Alliance does is … talk to the politicians and say stay out of the business of the people responsible for providing that security long term. Let them do their job,” Hill said.
The event was moderated by CNBC correspondent Emily Wilkins. The other panelists included Ben Ritz, Vice President of Policy Development at the Progressive Policy Institute; Lettie Nocera, Director of the American Savings Education Council for Bipartisan Policy Center’s Economic Policy Program; and, Yanira Cruz, President & CEO of the National Hispanic Council on Aging.
The full panel discussion is available on APSR’s YouTube: https://www.youtube.com/watch?v=YkaHhUsfmuU.