From The Atlantic: “This is What Life Without Retirement Savings Looks Like”, by Alana Semuels, Feb. 22, 2018
- the median savings in a 401(k) plan for people between the ages of 55 and 64 is currently just $15,000, according to the National Institute on Retirement Security, a nonprofit.
- Two-thirds of Americans don’t contribute any money to a 401(k) or other retirement account, according to Census Bureau researchers.
- Between 8,000 to 10,000 American Baby Boomers reach retirement age, turn 65, every day, according to Kevin Prindiville, the executive director of Justice in Aging, a nonprofit that addresses senior poverty.
- While poverty fell among people 18 and under and people 18 to 64 between 2015 and 2016, it rose to 14.5 percent for people over 65, according to the Census Bureau’s Supplemental Poverty Measure,
- In America in 2016, nearly half of all single homeless adults were aged 50 and older, compared to 11 percent in 1990.
- What can be done to help today’s seniors and generations to come? There are two approaches, Prindiville says: help people save for old age and make retirement more affordable.
Congress repealed an Obama-era rule [on May 2017] that had paved the way for states to create their own retirement savings plans for private sector workers.
Though the details vary by state, the basic model is to automatically enroll private sector workers who don't have a retirement plan through their jobs into a state-sponsored IRA, with a provision to opt out. The IRA would be vetted by the state, but provided by a private firm.
Opponents say the ERISA exemption strips Americans of federal consumer protections and imposes a new burden on employers by creating a patchwork of laws across the country. "I can only wonder why states think they will be able to produce better results than the private retirement savings system, which has been an unqualified success," said Senator Orrin Hatch on the Senate floor Wednesday.