Senator Tom Harkin delivers floor statement in support of Retirement USA
Mr. HARKIN. Madam President, I rise today to speak out in support of Retirement USA’s ‘‘Wake Up, Washington!’’ Month and to wake up my colleagues to the looming retirement crisis in this country. The public has already woken up. A recent survey found that 92 percent of adults aged 44 to 75 believe there is a retirement crisis in America. Now it is time for Congress to address this crisis before it is too late.
We are already seeing the beginnings of the retirement crisis. Just look at all of the older Americans forced to delay retirement or go back into the workforce because of the economic downturn. If we do not change course, it is going to get much worse.
Next year, the first baby boomers will turn 65, and it is clear that many are not prepared for retirement. According to the Employee Benefit Research Institute, nearly one-half of them are at risk of not having sufficient retirement resources to pay for basic retirement expenditures and uninsured healthcare costs.
The picture is not any better for the rest of American workers. Thirty-one percent of workers do not have any retirement savings at all, and 43 percent of workers have less than $10,000. If those numbers are not sobering enough, the Center for Retirement Research at Boston College calculated America’s retirement income deficit for Retirement USA. They estimate that the gap between what people need for retirement and what they actually have is $6.6 trillion. That is a scary number.
There simply is no question that retirement is getting less and less secure in this country. In the past, people relied on the ‘‘three-legged stool’’ of retirement security—private pensions, personal savings, and Social Security— but that stool has gotten awfully wobbly. Over 40 percent of workers lack access to any employer-sponsored retirement plan at all, the rising cost of living and stagnant wages are making it tougher for people to save, and our Social Security system is under attack.
It used to be that many workers could rely on defined benefit pensions. Those plans are one of the best ways to ensure that workers have a secure retirement because they provide a predictable, guaranteed source of income that workers can count on for the duration of their lives. But, unfortunately, the traditional defined benefit pension is an endangered species. The number of employers offering these plans has fallen drastically over the past three decades. Now, less than 20 percent of workers in the private sector have the security of a defined benefit pension.
The vast majority of employees with any retirement plan at all just have a 401(k), but those plans do not provide real retirement security. They leave workers exposed to the constant risk that the plans’ investments will perform poorly. Look at what has happened to people’s 401(k)s over the past few years. Billions of dollars of retirement savings have just evaporated, and lots of workers—especially people getting close to retirement—saw any chance they had of retiring vanish overnight. 401(k)s also do not provide workers with guaranteed lifetime income like traditional pension plans. That means that workers and their families are forced to bear the risk that they will outlive their retirement savings.
Plus, in these troubled economic times, families are facing unprecedented challenges and saving for retirement just is not an option for many. Wages have been stagnant for years, yet the cost of living keeps going up. People are working harder and longer than ever before, but they still cannot seem to meet the costs of basic everyday needs, like education, transportation, and housing, let alone save enough to support them in their old age.
For many Americans, the only retirement security they have is Social Security, but that, too, is under siege. There are those that want to privatize the system, cut back benefits, and raise the retirement age. They say that everyone should just work longer and that retirement is a ‘‘luxury.’’ Clearly, those people do not swing a hammer for a living. They do not toil in our corn fields or work on our oil rigs. For Americans who work in these physically demanding jobs, working longer simply is not an option. A lifetime of hard work takes its toll, and at some point, a person just cannot do it anymore.
We are facing a future where no one other than the rich will have the opportunity for a safe and secure retirement. People that work hard for their entire lives will find themselves teetering on the brink of poverty, unable to pay the basic costs of living. That is going to have drastic consequences for families and our country as a whole. It is time for our Nation to face the retirement crisis head on, and for our lawmakers to take aggressive action to protect future generations. We can start by working on some fixes for the current system. We need to shore up the Pension Benefit Guaranty Corporation, protect Social Security, and address the problems facing the Nation’s corporate and multiemployer pension plans. We should also consider improvements to 401(k) plans like improved disclosures and lifetime income solutions. But all of those things are just short-term fixes.
We need to go further. We need to work toward comprehensive reform of our retirement system. Americans who have worked hard and played by the rules deserve a secure retirement. They deserve to be able to enjoy their golden years, to spend time with their families, and to rest after a lifetime of hard work. We need to help people to work toward a secure retirement by expanding access to retirement plans, making it easier for workers to save, and finding ways to make sure they do not have to worry about outliving their savings.
The retirement crisis is just too big to ignore, so as chairman of the Committee on Health, Education, Labor and Pensions, I am making retirement security a priority. The committee will be holding a series of hearings to explore the difficult issues surrounding retirement security, and I am hopeful that, together with my colleagues on both sides of the aisle, we will be able to come up with creative solutions to our Nation’s retirement challenges.
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