To help Americans prepare for retirement, plan sponsors and the federal government should be working to help individuals better understand their Social Security benefits, Cheryl Evans, director of lifetime financial security for MI Finance, a pillar of the Milken Institute, said Jan. 23.
"We don't want people living on (Social Security benefits alone)," Evans said at the EBRI-Milken Institute 2024 Retirement Symposium in Washington. "We want people to sort of think about (their Social Security benefits) as early as possible and understand what that amount would look like."
Evans conveyed this idea, along with many others, as part of a presentation on her August report, "Shifting the Retirement Paradigm: Moving toward Lifetime Financial Security," which she authored with MI Finance Associate Mairead Trainor.
"We feel like the government, as well as plan sponsors, should do a little better job in directing people to really go online" and estimate their Social Security benefits, Evans said in a follow-up interview on Jan. 23.
It's important for individuals to understand what their benefits look like at an early age, long before they retire, "because some people are quite shocked that they're getting much less than they thought," she added.
"We're really highlighting that sort of emphasis on early knowledge (and) calculating your benefits," Evans said, because trying to get individuals to rely on more than their Social Security benefits is a "challenge that we can't readily fix."
Part of that challenge is making sure that everyone has access to a retirement plan, she said, and some "state plans are filling that void" through various government programs. As of Jan. 1, 19 states have enacted state-run retirement savings programs, 15 of which are auto-IRA programs, according to Georgetown University's Center for Retirement Initiatives.
"Those are really great developments," Evans said, though ultimately, federal legislation on that issue could help, as the U.S. lacks a national mandate requiring that every employer set up a retirement plan.