[Public Papers of the Presidents of the United States: George W. Bush (2002, Book I)]
[February 28, 2002]
[Pages 308-312]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks to the National Summit on Retirement Savings
February 28, 2002

    Thank you all very much. I appreciate that warm welcome. It's a 
pleasure to be here with friends and those who are promoting an 
important cause, and that is promoting the security and dignity of 
Americans who are in retirement.
    Americans can help secure their own future by saving. Government 
must support policies that promote and protect saving. And saving is the 
path to independence for Americans in all phases of life, and we must 
encourage more Americans to take that path.
    I want to thank the Secretary of Labor, Elaine Chao, for helping put on this conference, and I appreciate her 
service. I appreciate the Director of the Small Business Administration 
for being here; Hector, thank you for 
coming. It is good to see at least one fellow Texan, Sam 
Johnson. I appreciate you being here, Sammy; 
thank you for coming. And I appreciate Bill Roth, the former Senator from Delaware, for being here as well. 
Thank you, Senator, for coming today.
    Just over 100 years ago, at the turn of the last century, the 
average life expectancy in America was only 47 years. Today, that number 
has increased by three full decades. This amazing advance in the health 
of Americans is also profoundly changing our society. Americans who 
retire today may have decades--decades--of healthy life before them.
    This is time to volunteer, making seniors one of the greatest 
resources of compassion in America. This is time for family, to pass on 
values to grandchildren and to strengthen the bonds between grandparents 
and family members. And increasingly, retirement is a time of new 
beginnings, a time to travel and explore, a time to take up new hobbies, 
and a time to take up new careers. Some 80 percent of baby boomers--I 
happen to be one--[laughter]--say they plan to work at least part-time 
in retirement. And smart employers will be wise to use their experience 
and their competence.
    The choices seniors make in retirement should not be limited by 
arbitrary dates or obsolete stereotypes. Increasingly, the choices of 
seniors will only be limited by two things, the state of their health 
and the state of their savings.
    Because the nature of retirement is changing, the needs of 
retirement are changing as well. Older Americans now require a 
retirement nest egg large enough for decades of enjoyment and ambition. 
As medicine increases the length of life, adequate savings must increase 
the options we have on longer lives.
    Saving is never easy; it's hard for some to do. But it's always 
worthwhile, particularly when you think about the power of compounding 
interest. The power of compound interest is one of the great advantages 
of American citizens, and they must learn to use it. If a worker starts 
saving just $20 a week at age 22 and earns a 5.5 percent real interest 
rate on the investment, that adds up to a nest egg of nearly $180,000 by 
age 65.

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    This summit was created by Congress to educate workers and citizens 
about the power and rewards of saving, and I want to thank you for 
participating. You've accomplished a great deal, but there's much more 
to do.
    Americans are saving too little, often dangerously too little. The 
average 50-year-old in America has less than $40,000 in personal 
financial wealth. The average American retires with only enough savings 
to provide 60 percent of his former annual income. This problem is 
especially acute for women and minorities.
    We must encourage, for all our people, the security and independence 
provided by savings. I want America to be an ownership society, a 
society where a life of work becomes a retirement of independence.
    Savings start as an individual responsibility, but Government can 
help by expanding the rewards of saving and by strengthening protections 
for saving. Last year, the Congress passed and I proudly signed powerful 
new incentives for retirement savings. Many of you in this room were 
involved in that effort, and I want to thank you.
    We relaxed the restrictions on how much workers can invest in their 
individual retirement accounts and 401(k) plans. Last year's tax relief 
plan allowed workers over the age of 50 to make overpayments to their 
retirement plans. This is especially important for women who take time 
out of the labor force to stay at home with their children.
    We passed some important reforms to give workers more choices and 
more rights. We created a new kind of 401(k) that allows workers to pay 
their taxes now and make tax-free withdrawals when they retire, just 
like the way the Roth IRA works. And we required companies to vest their 
employees' retirement rights more quickly. Your retirement money becomes 
yours faster, now more than ever.
    And finally, we made it easier to roll over retirement savings from 
one account to another. We know that American workers change jobs more 
frequently today than they used to. This means that people are seeing 
opportunity, and they're seizing it. But if workers are going to move, 
their retirement savings need to move with them without unnecessary 
bureaucracy and unnecessary paperwork.
    Thanks to the 2001 tax relief program, our Tax Code is now 
friendlier to saving than it has been in a long time. Not only am I 
proud of cutting taxes, I'm proud of reforming the savings, and I'm 
proud of the good work that Congress did on this matter.
    But there's still more to do. Even when people are saving enough, 
they need to feel more secure about the laws protecting their savings. 
In recent months, we've seen how workers can lose a lifetime's worth of 
savings if their company were to fail. So my administration has proposed 
reforms to make sure that the money Americans put away in their working 
years grows safely, so it is available in their retirement years.
    More than 40 million workers own 401(k) accounts totaling over $1.8 
trillion in assets. Many of these assets have been contributed by 
employers who match their workers' own savings. We know that employers 
contribute more when they have the option to give company stock as well 
as cash, and that option ought to remain as positive for American 
workers. But a worker should also have more freedom to choose how to 
invest their retirement savings.
    Companies that contribute stock to employee 401(k)s should not be 
permitted to lock their employees into owning that stock for years and 
years. My proposal will allow workers to sell company stock and 
diversify into other investment options after 3 years in their own 
company's plan. We need action to give workers the right to put their 
savings--to put their eggs in more than one basket.
    Another important reform addresses the issue of blackouts, times 
when employees are not free to change or access their retirement 
accounts. When companies black-

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out a pension plan, they temporarily take away a worker's freedom to 
choose for themselves. Workers should be given a 30-day notice before 
any blackout period begins, and company officers should not be allowed 
to sell their own company stock when workers cannot. What's fair on the 
top floor should be fair on the shop floor.
    To make good investment decisions, workers need sound advice and 
timely information. Employers should be required to provide updates on 
workers' retirement account values every 3 months. And we should change 
current law to remove the threat of lawsuits from employers who provide 
sound third-party investment advice.
    All these measures will help build faith in America's pension 
system, and I urge Congress to act. I want to thank Senators Tim 
Hutchinson and Chuck Grassley and Representatives Boehner, Portman, and Cardin for their bipartisan efforts to put forward good, 
commonsense legislation that seeks to achieve many of these pension 
reform principles.
    Every American deserves to be an owner in the American Dream. That 
dream includes a sound pension plan and adequate private savings, and it 
is ultimately completed by Social Security reform. Some people like 
their Social Security exactly the way it is, and they'll be able to keep 
it exactly the way it is. But for younger workers who want to take 
advantage of the power of compounding interest, we should allow for 
personal retirement accounts.
    Today, Social Security is not a personal savings program. Retirees' 
benefits are paid directly from the taxes paid each year by current 
workers. The average return on Social Security is less than 2 percent. 
And in the long run, Social Security can pay retirees less than 30 
percent of what they earned before retiring, and that's not good enough 
as we head into the 21st century.
    We can do better, and a lot of people know this. Someone retiring 
today after 45 years of work would be entitled to a monthly benefit of 
$1,128 a month from Social Security. If that same retiree--if those 
Social Security taxes had been invested in the stock market over the 
last 45 years, during the same period of time, that person would now 
have a nest egg of $590,000, or income of more than $3,700 a month.
    Because there will be an expanding number of retirees for Social 
Security to support in the future, we must apply the power of savings, 
investing, and compound interest to the challenges of Social Security by 
introducing personal retirement accounts into the system. Americans 
would own these assets. After all, it is their money. They would see 
more retirement income, and that's necessary as people live longer 
lives. And as importantly, they would be able to pass these accounts on 
to their children.
    Franklin Roosevelt told the U.S. Congress in 1935 that his goals for 
Social Security included providing a secure retirement to American 
workers and making sure all Americans could build their personal wealth. 
We must dedicate ourselves to both those goals.
    At a time when older Americans have longer lives and more options 
than ever before, we need to ensure they have access not just to a 
monthly check but to personal wealth. And I mean all Americans, not just 
a few but all Americans, especially women and minorities who are often 
shortchanged by the current Social Security system.
    Robert Johnson, the CEO of Black 
Entertainment Television, explains it this way, ``African Americans die 
earlier, therefore receiving less in the form of Social Security pay-
outs. One of the ways to address this is through the use of wealth-
generating private accounts that form part of an estate opportunity for 
African Americans.'' And Lea Abdnor, a member of 
the President's Commission to Strengthen Social Security, as was Mr. 
Johnson, said, ``I believe very strongly that we have to give women the 
opportunity to create ownership and wealth

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for the first time.'' And I couldn't agree more.
    My administration is working to expand growth and opportunity in our 
economy. That's why we cut the taxes. And we've got to make sure 
opportunity is available as a result of people being able to own 
something, own their own money so they can manage it themselves, own 
their own portfolio, have the capacity to generate wealth. The 
generation of wealth should not be limited to a few in our society; it 
ought to be an opportunity for everybody. There's nothing better than 
providing the incentive to say, ``This is my asset base. I own it. I 
will live on it in retirement, and I will then pass it on to somebody in 
my own family.''
    If you own something in America, you own a stake in America's 
future. And a good retirement vision, a good retirement future says that 
we must reform Social Security, not only for the good of the system but, 
as importantly, for the good of American workers who work all their life 
so that they can have an asset base to call their own.
    So as you continue to meet, I hope that you will think not only 
about the short-term issues we face but how best to make sure that the 
retirement promises are kept, and how to make sure that as we devise--
come up with new systems and new structures, that we fundamentally 
change America for the better, that we make the system open, and that 
opportunity extends its reach throughout every neighborhood. It is such 
a wonderful opportunity for the country, and I hope you join me in 
seizing it.
    I want to thank you for giving me the chance to come by. 
Elaine is right; I do worry about the 
security of the American people. I worry about the security of those who 
retire. And I want you to know, every day I'm worried about the homeland 
security, too. Every day we wake up--I wake up and go into the beautiful 
Oval Office and read about threats to the United States, and it reminds 
me that the security of this country is my most important job.
    And I want to assure you all that our administration is doing 
everything that we possibly can to make sure innocent Americans do not 
lose their lives here at home. We're running down every lead. We're 
following every hint, every suggestion, every opportunity to chase down 
some possible clue of an attack. We are doing it. And I'm proud of our 
law enforcement officers at the Federal, State, and local level for 
their diligence.
    But I also want to remind you that in order to make sure the 
homeland is secure as it can possibly be for our children and 
grandchildren, that we must hunt down the killers and would-be killers, 
terrorists, Al Qaida terrorists, and bring them to justice. This is 
going to require more time than people may want. It's going to require a 
patient and determined nation.
    But having traveled around the country some, having had a chance to 
listen to the American people, I'm proud of the fact that our Nation is 
patient and is determined. Because our Nation understands that we fight 
for freedom, and anytime our freedom is challenged, we stand strong in 
the face of those who would take away our freedom.
    Our military is making great strides. I'm proud of the U.S. 
military. And as fellow Americans, I will assure you that so long as I'm 
the President, I will do whatever it takes to protect the American 
people.
    I want to thank you for letting me come by. May God bless you all.

Note: The President spoke at 1:23 p.m. in the Presidential Ballroom at 
the Capital Hilton Hotel. In his remarks, he referred to Robert L. 
Johnson, chairman and chief executive officer, BET Holdings, Inc.; and 
Leanne Abdnor, former executive director, Alliance for Retirement 
Security.


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