Democratic presidential candidate Pete Buttigieg, the mayor of South Bend, Indiana, released Monday a new proposal for a public 401(k) option as a companion to his health care proposals.
Buttigieg “is proposing to create a government-run 401(k) plan that would be attached to Social Security,” said Brian Graff, president and CEO of the American Retirement Association in Washington.
“Similar to his health insurance proposal, employers with existing defined benefit plans would be able to keep those plans,” Graff explained. “Employers with existing defined contribution plans would be able to keep their plans as long as they met minimum requirements including a 3% contribution requirement on behalf of employees.”
Buttigieg “is subscribing to the view of many of his other Democratic presidential candidate colleagues that the government always does it better,” Graff opined.
On his website, Buttigieg states that “as Baby Boomers continue to approach retirement, more and more Americans are confronting the challenges of aging. After full careers, many Americans continue working longer because they can’t afford to retire. For the first time in our nation’s history, there will be more older adults than children. In 2020, half of adults who reach 65 will require long-term care. By 2026, we will require 7.8 million new care jobs. At the same time, more and more Americans are becoming eligible for Social Security — even as the Trump Administration has attempted to undermine Americans’ retirement by cutting billions of dollars from Social Security over the next decade.”
He declared on this website it’s “time for a new approach.”
As for long-term care insurance, Buttigieg has proposed the Long-Term Care America services and supports program.
Those eligible will receive a benefit of $90 per day for long-term care for as long as they need it. Of people currently 65 or older, 11.3 million people will receive benefits from the program at some point in their life.
The cost of long-term care varies across the country, but according to Genworth, a private room in a nursing home costs $280 a day on average, while adult day care services average $53 a day.
Buttigieg has also vowed to “strengthen the private long-term care insurance market for those with shorter-term long-term care needs by standardizing plans and establishing a long-term care insurance marketplace.”
— Related on ThinkAdvisor: