Monday, July 15, 2013

American retirement savings

Nick Summers in a piece about Australia's retirement system (In Australia, Retirement Saving Done Right Bloomberg Businessweek 05/30/2013) presents some sobering figures on the state of Americans' retirement systems and savings:

Just 40 percent of Americans who worked in 2011 participated in an employer’s retirement plan, according to the Employee Benefit Research Institute. U.S. workers also have a bad habit of liquidating their accounts when they change jobs, instead of rolling them over, and paying high taxes for the privilege. Only 13 percent of American workers say they are "very confident" they will be able to live comfortably in retirement, according to a March EBRI survey in which 57 percent of respondents reported having less than $25,000 in savings. "As a country, we are woefully underprepared for retirement," Senator Tom Harkin (D-Iowa) wrote in a report last year. It said there is a $6.6 trillion gap between what Americans have saved and what they will need, and that the traditional three-legged stool of company pensions, personal savings, and Social Security "has become increasingly wobbly as pensions have disappeared and the middle class is finding it harder to save."
A big reason while the proposal by President Obama this year to cut benefits on Social Security and Medicare is such a monumentally bad idea.

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