America isn’t saving enough for retirement. Can that be fixed before it’s too late?
The race is on to save Americans’ golden years.
The aging of baby boomers, the looming funding crisis for Social Security and the meager size of many workers’ nest eggs — if they have one at all — have spurred candidates, lawmakers and experts to propose ways to boost retirement savings.
Politicians even are talking about making changes to Social Security, long known as the third rail of politics because touching it was thought to be a career-killer. The looming financial train wreck awaiting the popular entitlement program and the increasing number of older Americans who depend on it hasn’t left much of an alternative.
A consensus has developed that the nearly four-decade-old transition from employer-sponsored pensions to individual 401(k) plans has been a failure for all but the wealthiest Americans and that something needs be done — soon.
The point was driven home Friday when markets convulsed over the U.K.’s vote to exit the European Union. Like the financial crisis and Great Recession, which drained 401(k) accounts and pummeled Americans’ finances, the Brexit stock selloff left retirees shaken.
“The longer we wait, the more draconian the solutions will have to be,” said former Sen. Kent Conrad (D-N.D.), who co-chairs the Commission on Retirement Security and Personal Savings launched by the Bipartisan Policy Center think tank.
President Obama has pushed retirement savings initiatives, presidential candidates have talked about Social Security on the campaign trail and several states, including California, are taking their own steps to help workers put away more money.
“There’s more activity around retirement savings than there has been in 20 years,” said Teresa Ghilarducci, an economics professor at the New School in New York and expert on the issue.
Statistics illustrate the dire situation facing millions of Americans.