The Senate Special Committee on Aging convened this week to discuss the projected U.S. retirement income gap, valued by speakers at close to $8 trillion; despite the massive shortfall, optimism was in pretty good supply.
U.S. Senators Susan Collins and Claire McCaskill, respectively the Republican Chairman and Ranking Member of the Senate Special Committee on Aging, hosted the meeting in Washington, D.C. According to the two senators’ opening commentary, as of 2015, the difference between what people have saved and what they will need to live in retirement “was a staggering $7.7 trillion.”
“This serious gap is concerning workers across our country, 82% of whom say their generation will have a much harder time achieving financial security compared to their parents’ generation,” Senator Collins suggested, citing figures from the Bipartisan Policy Center. “According to the Center for Retirement Research, there is an estimated $7.7 trillion gap between what Americans have saved for retirement and what they will actually need. Making matters worse, the Federal Reserve found that nearly half of individuals do not have enough savings to cover an emergency expense of $400. That’s not even enough to buy new tires for a car.”
Making matters worse is that many people are withdrawing from their retirement accounts just to pay unexpected expenses, said Senator Collins, adding that neither political party “has a monopoly on good ideas to address this crisis.”
With these issues in mind, the hearing examined the findings of a two-year study conducted by the Bipartisan Policy Center’s (BPC) Commission on Retirement Security and Personal Savings. Former Senator Kent Conrad and James Lockhart III, who serve as co-chairs of the Commission, testified about the BPC Commission’s work to identify recommendations that could increase and improve retirement savings.
NEXT: Specific recommendations to the committee