Twelve men and women in Washington, D.C., have embarked upon a treasure hunt of sorts. Behind closed doors and with little fanfare up to this point, the Joint Select Committee on Deficit Reduction, commonly known as the “super committee,” is searching every corner and crevice of the federal budget for $1.3 trillion in spending cuts and/or revenue increases over the next 10 years.
It's undeniably a tough job. They accepted this challenge as part of the deal brokered over the summer to raise the U.S. debt ceiling and prevent the United States from defaulting on our loans.
But as members of Congress turn over the nation’s couch cushions in search of cash, it is important for everyone to keep in mind that real Americans are in need of money, too. Especially if they ever want to retire.
A recent survey by the Employee Benefits Research Institute (EBRI) found that half of all Americans aren’t confident they will have enough money to live comfortably in retirement. An additional 36 percent say they are only somewhat confident.
Statistics bear out these feelings. Fidelity Investments reported earlier this year that the average 401(k) balance was only $72,700. A separate EBRI study from 2009 found that 401(k) participants aged 60-69, people who are often either retired or right on the doorstep, had an average balance of $144,000. That’s not enough money to get most people through retirement, and the results include only those who are participating. Much more troubling, around 4 of every 10 workers have no retirement savings, whatsoever.
Wherever the super committee comes up with its deficit reductions, we cannot afford any plan that would exacerbate the challenges Americans now face as they try to provide for the future financial security of themselves and their families. In fact, we need to encourage employers and workers to contribute more to retirement savings.
Fortunately, a number of members of Congress agree.
Reps. Jim Gerlach (R-PA) and Richard Neal (D-MA) have introduced a concurrent resolution in the House of Representatives that touts many of the benefits of retirement defined contribution plans and states:
- tax incentives for retirement savings play an important role in encouraging employers to sponsor and maintain retirement plans and encouraging participants to contribute to such plans;
- existing tax incentives have increased the number of Americans who are covered by a retirement plan; and
- a reformed and simplified Tax Code should include properly structured tax incentives to maintain and contribute to such plans and to strengthen retirement security for all Americans.
We couldn't agree more. NAIFA encourages every member of Congress to support the Gerlach-Neal resolution and to sign on as cosponsors.