WASHINGTON – The magnitude of the nation’s retirement income crisis was revealed at a press conference in Washington, D.C., today, with the release of the Retirement Income Deficit – the gap between the pensions and retirement savings that American households have today and what they should have today to maintain their living standards in retirement. Using conservative assumptions, the Retirement Income Deficit is estimated to be $6.6 trillion. The figure was released by Retirement USA at the start of “Wake Up, Washington!” Month, a speak-out on retirement security that runs from September 15 to October 15.
“While policymakers talk about budget deficits, there is a massive and growing Retirement Income Deficit that has largely been ignored by Washington,” said Karen Friedman, executive vice president and policy director of the Pension Rights Center. “The Retirement Income Deficit shows just how bad the crisis has become.”
The Retirement Income Deficit is based on projections of retirement income and wealth for American workers ages 32-64. The figure was calculated for Retirement USA by the Center for Retirement Research at Boston College, using methodology developed for the Center’s National Retirement Risk Index.
“The key sources of income that retirees have relied on are either under attack – in the case of Social Security – or disappearing – in the case of traditional pensions,” said Ross Eisenbrey, vice president of the Economic Policy Institute, “401(k) plans are not working, and millions of workers have neither a pension nor a 401(k) account. Clearly, the current private retirement system is failing most Americans.”
In announcing the Retirement Income Deficit, Maria Freese, director of government relations and policy for the National Committee to Preserve Social Security and Medicare, said, “It is important to remember that $6.6 trillion is a conservative figure. Using other assumptions, it could be much higher. The number should be a wake-up call. It is a measure of how far behind Americans are in their retirement savings today. Cuts to Social Security, pension freezes, and 401(k) losses on the stock market could easily make the Retirement Income Deficit much, much worse in the future.”
Throughout “Wake Up, Washington!” Month, organizations and individuals will focus on the retirement income crisis on their blogs, on Facebook, and Twitter. On the Retirement USA website, people across the country can voice their retirement security concerns through an online story bank, and petition policymakers to focus on the nation’s real retirement income problem – not Social Security, but our patchwork private retirement system.
Featured at the press conference were two women, who shared their own personal retirement income deficit stories and who will be part of the story bank: Shareen Miller of Falls Church, Va., and Constance Canby Morton of Westmoreland County, Va. Miller is a personal care assistant who has no retirement plan through her employer. She is afraid that she will never be able to retire, but she is also worried that she will not be able to continue to work in her physically demanding job as she ages. Canby Morton is a 66-year-old retiree who has neither a pension nor a 401(k). She and her husband have health issues, which have eaten into their savings, and they rely solely on Social Security.
“The story bank shows that the Retirement Income Deficit is not merely an abstraction,” said Gail Dratch, legislative representative for the AFL-CIO. “The crisis impacts Americans of all ages and from all walks of life. These are the faces behind that number.”
Retirement USA is a campaign for a new retirement system that, along with Social Security, will provide universal, secure, and adequate income for future retirees. The AFL-CIO, the Economic Policy Institute, the National Committee to Preserve Social Security and Medicare, the Pension Rights Center, and the Service Employees International Union are conveners of Retirement USA.