It’s Time to Take the Risk Out of Retirement
Amidst the deluge of polls, electoral counts, and predictions for yesterday’s election, a different number was released that shows the grim state of Americans’ retirement security. According to a new report from the Center for Retirement Research, the National Retirement Risk Index jumped to 53 percent in 2010, meaning that more than half of U.S. households are at risk of not being able to maintain their standard of living in retirement. That's an increase of nine percent -- from a 44 percent risk in 2007. Other equally gloomy statistics were included in a front-page article in yesterday's Washington Post on "The Distant Dream of Retirement."
Fortunately, a growing number of policymakers are taking steps to take the risk out of retirement. Earlier this year, Massachusetts became the first state to implement a state-administered retirement plan for nonprofit employees. More recently, California enacted legislation that will allow the state to administer a new retirement program for private-sector workers whose employers don’t already offer a retirement plan. Across the Atlantic, the United Kingdom began implementing a new nationwide retirement program. And here at home, there is growing support for a comprehensive proposal put forward by Senator Tom Harkin. Pensions & Investments heralded the proposal as "a hit," and in an online P&I poll, 73 percent said that they supported the concept.
During this campaign season, the topic of retirement security was largely overlooked, even though it is a high-priority issue for most people. With the election behind us, it’s time for more lawmakers, both here and abroad, to start paying greater attention to this important issue.
Looking for help with your retirement plan?
If you have a problem with your retirement plan, free help may be available from the U.S. Administration on Aging's network of Pension Counseling and Information Projects. Find help now.
PensionHelp America connects people who need help with their pension, 401(k), and other retirement plans with the pension counseling projects, legal services providers, and government agencies that can help answer their questions. Visit www.pensionhelp.org.
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Retirement USA is a national initiative that is working for a new retirement system that, along with Social Security, will provide universal, secure, and adequate income for future retirees. Visit the website.
Did You Know?
A defined benefit plan is a pension plan, usually funded entirely by employer contributions, that pays benefits according to a formula. The formula is typically based on the participant's wages or salary and length of time spent working for an employer or group of employers. Defined benefit plans are also known as traditional or guaranteed pensions.