What is the biggest financial fear for a majority of Americans? According to a recent national poll, 80 percent are more afraid of running out of retirement savings than they are of their own deaths. This was just one of the eye-opening nuggets brought to light on April 30 during “The Retirement Crisis," the Lundquist College's first-ever Fred P. Thompson Lecture.
Organized and moderated by Abbott Keller Professor of Finance John Chalmers, the event brought together Stanford Graduate School of Business professor of finance Joshua Rauh and Oregon State Treasurer Ted Wheeler to share their perspectives on the the country's retirement prospects. Rauh—who is also a senior fellow at Stanford's Hoover Institution, the public policy think tank—kicked off his talk by asking whether a crisis even exists. After examining the problem from a wide range of perspectives, Rauh answered his original question in the affirmative: Yes, there is a crisis, but it's something that can be solved. He then provided his three-part prescription for retirement health.
“The retirement crisis should be addressed by encouraging saving, by financial education, and by encouraging working longer," he said.
Next up was Wheeler, who started off with an Oregon-specific look at the retirement landscape and then talked about the Oregon Retirement Savings Task Force (he's the chair) and its recommendation for a basic retirement-security plan available to all Oregonians. Structured similarly to the state's successful Oregon 529 college savings plan, the proposed retirement security plan would provide an easy, optional savings vehicle for private-sector employees who aren't currently offered retirement plans through their workplace.
“We're trying to create what I would almost describe as an entry-level retirement savings tool. Think of it as the minimum wage for retirement savings vehicles," said Wheeler. “The goal is for people to eventually—once they've developed the habit of saving for retirement or once they get into an income level where they can get into a better plan—roll out of this plan."
“This program would encourage people who can save for retirement to voluntarily do so because if cannot get people to do so, we know that the cost to taxpayers down the road could be staggering," he added.
More than 100 students, faculty members, and area residents attended the event. During Rauh and Wheeler's talks, audience members submitted questions via index cards. The two experts then took turns fielding the questions from the audience.
The lecture—the first in a projected series—was made possible by a gift from Fred P. Thompson "51, chairman of Powder River, Inc., whose vision is to bring leading lights in academia, business, and government to campus to share their views and discuss solutions to vexing problems for the benefit of our students, community, and society.