McCaskill: Americans Aren’t Saving Enough for Retirement

Senator reacts to new reports showing $7.7 trillion “retirement gap,” and that nearly half of all Americans have no retirement savings at Aging Committee hearing

WASHINGTON – U.S. Senator Claire McCaskill today expressed alarm that the retirement security of millions of American households could be in jeopardy when new reports revealed that nearly half of all Americans had no retirement savings—facing a cumulative $7.7 trillion ‘retirement gap.’ McCaskill, the top-ranking Democrat on the Senate Special Committee on Aging, joined Chairman Susan Collins (R-Maine) to head a bipartisan hearing in that committee examining the financial landscape faced by current and future retirees.

“This retirement security crisis is very real,” McCaskill said. “Despite the development of tax-favored retirement accounts and other incentives, many individuals – especially lower- and middle-income Americans – are not saving. In my home state of Missouri, only 45 percent of private sector workers are participating in an employer-sponsored retirement plans, and that is not an anomaly.”

The panel included Washington University in St. Louis Professor Michal Grinstein-Weiss, whose research focuses on what can be done to help low- and middle-income households save enough for a secure retirement. Also on the panel were Jean Chatzky, financial journalist and financial editor for NBC’s Today Show, Alicia Munnell, PhD, Director, Center for Retirement Research, Boston College and Rob Carmichael, Human Resources Director, Maine Savings Federal Credit Union.

McCaskill continued: “Most economists will tell you that it is far easier to get people to save money for retirement through a payroll deduction at work instead of requiring them to open up an IRA on their own. The problem is that many low-income workers face real structural barriers to saving: they work seasonal jobs, or are in and out of the workforce before they can vest or they work for employers who have neither the time nor the resources to offer a retirement plan.”

The hearing came against the backdrop of two reports issued today showing a bleak landscape facing many Americans as they approach retirement. The National Institute on Retirement Security released a report on the current state of American retirement savings, including the fact that nearly half of all American households currently have no money saved for retirement.

Additionally, the Center for Retirement Research at Boston College released information showing a $7.7 trillion dollar “retirement gap” for American workers. This number represents the amount of additional savings American households would have to add in order to maintain their living standards in retirement.

Recent polling indicates that more than 90% of Americans think there’s a ‘retirement crisis’ in America.

McCaskill and Collins recently became the heads of the Senate Special Committee on Aging, which leads discussion and debate on matters relating to older Americans.

Visit mccaskill.senate.gov/consumers to learn more about McCaskill's fight to protect consumers

###