Americans Doing “Quite Well” Saving For Retirement Says Senate Aging Committee Lead Republican
Americans are doing “quite well” saving for retirement, says a new report from Senate Aging Committee Ranking Republican Tim Scott of South Carolina.
“We are not in the midst of an impending retirement crisis….Painting a picture of a crisis is misleading and paves the way for unnecessary government intervention,” the Scott report asserts.
The report says poverty falls as Americans retire pointing to Census Bureau figures that while five years prior to retirement, 5.5 percent of Americans had incomes below the poverty line, the poverty rate fell to 3.6 percent by the fifth year after retirement – a one-third reduction.
The nation’s three-legged retirement system of Social Security, public and private pension plans, and individual savings is largely responsible for the decline in poverty, the report asserts:
“These systems combine to provide enough resources for Americans, including low-income Americans, to maintain or even improve their standard of living in retirement.”
Buttressing its assertion retirees are doing relatively well, the Scott report says since 1979, retiree incomes have grown significantly more quickly than the incomes of working Americans: 109 percent growth above inflation for seniors, as opposed to 69 percent for working-age households.
The growth in retiree income has led to a drop the poverty rate of older Americans had fallen by over two-thirds in the past five decades.
To help those struggling to achieve retirement security, Senator Scott in the report is calling for legislation to expand retirement plan access, grow lifetime income options, codifies the Department of Labor’s new auto-portability rules, strengthens and expands Heath Savings Accounts, simplifies confusing Social Security laws, protects the gig economy and helps seniors who become entrepreneurs.
His study added assistance is also needed for employees of small businesses who have lower participation rates in employer-sponsored retirement accounts.
“Only 34 percent of employees in businesses with less than 49 employees participate in an employer-provided retirement plan compared with 77 percent of employees in businesses with 500 or more employees,” the study notes.
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