The U.S. House Education and Labor Committee held a hearing early this week on the impact the credit crunch is having on retirees 401k plans. On the same day, AARP release two reports examining the state of Americans’ retirement and financial security. The findings of these reports paint a bleak picture for retirement dreams right now and in the future. The first report, “Retirement Security or Insecurity? The Experience of Workers Aged 45 and Older,” finds that 13 percent of Americans 45 and older are tapping into their retirement accounts, or other investments, to cover day-to-day expenses. It also found that 20 percent have stopped contributing to retirement accounts during the past 12 months, which is further jeopardizing their long-term retirement dreams. For millions, saving for retirement at work is not an option at all.
The second report by AARP’s Public Policy Institute found that about 51 percent of workers do not have pension coverage at their current job. In that report, “The Coverage of Employer-Provided Pensions: Partial and Uncertain,” AARP found that millions of Americans still lack the ability to save for retirement at work as businesses shift the burden of risk toward employees. It looks like workers closest to retirement may suffer the biggest hit from the financial meltdown and have to delay retirement for up to 5-10 years. So the question becomes, where is there more equity now…..a senior’s home or their retirement accounts?
For more information on the hearing, click here.