Iowa Senator Leads New Call For Universal, Professionally Advised Private Retirement System Hot

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Harkin, a Democrat, is currently holding a series of hearings on the long-term evolution of retirement from a system that still assumes that Americans will rely on vanishing pensions to something more like a universal 401(k) platform.


As he notes, even now, the Social Security program may be healthy -- he's a fan -- but it just isn't enough to handle the typical person's retirement income needs.


And the current 401(k) system is cluttered with confusing rules and disincentives that keep all but a relative handful of Americans from participating to the fullest, much less reaping the best possible returns on their savings.


Harkin would like to streamline the 401(k) system and open it up to universal professional management. He also seems to be fighting for a form of defined benefits much like what Social Security now offers -- "a check for a certain amount every month," in his words. 


This kind of annuitized approach doesn't look much like today's 401(k) plans, but in any event maybe Harkin has something more concrete in mind for how those professional managers will deal with risk and volatility in their client portfolios.


One elephant in the room: the Boomers who are nearing retirement age, but no longer really have time left in the accumulation phase to build up a viable nest egg.


If half the oldest Boomers are truly at risk, then the crisis isn't when Social Security uses up its reserves. The crisis is now, and Congress will need to deal with it sooner rather than later.


And with 84% of the population apparently feeling that the retirement system is under significant stress already, the time to talk about an overhaul may be now.


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