Lev. 19:32 - You shall rise before the aged and show deference to the old; you shall fear your God, I am the Eternal (JPS TaNaKh).
Exodus 20: 12 - Honor your father and your mother that you may long endure on this land that the Eternal your God is assigning to you. (JPS TaNaKh)
If you are like millions of other Americans, the answer to the above question is most likely “No, not even close.” As people of faith, we are taught the value of respecting and caring for our elders. But the reality is millions of hard-working Americans have little or no retirement savings. How are we honoring our mothers and fathers if we are standing by while so many are facing retirements in dire poverty? Nor is this only an issue for the elderly – among all age groups, retirement savings are woefully inadequate, often non-existent.
Sadly, 45% of U.S. households have no retirement savings at all. When averaging the savings of both those with and those without retirement accounts (pensions, 401k’s), the median savings for all households is a mere $2500; for those close to retirement, the median is $14,500. Women are 80% more likely than men to be impoverished at age 65 and older. Women age 75 to 79 are three times more likely.
For families of color, the situation is much worse. One out of two white households has less than $10,000 in retirement savings. For African Americans, it is three out of four households, and 4 out of 5 for Latino households.
Here in Wisconsin, a retirement crisis is looming. Half of Wisconsin households have NO retirement savings. 30% of Wisconsin seniors have only Social Security to rely on, and the average Social Security benefit in Wisconsin is $1,281 per month.
There are many reasons for the lack of retirement security. For low-income workers who struggle just to pay their weekly bills, saving money toward retirement is an impossible dream. For mid-to upper-income families, retirement security often depends on whether they have access to employer-sponsored pension funds.
In Wisconsin, public employees participate in the Wisconsin Retirement System (WRS), which is a Defined Benefit Plan (DBP), which is provided by the employer, has low fees, low-risk because investments are pooled, and guaranteed income upon retirement. However, only 12% of Wisconsinites belong to this system.
For most people, in Wisconsin and around the country, if they have any retirement plan at all, it is a Defined Contribution Plan (DCP) – usually a 401k account. The fees are considerably higher than a DBP, contributions come from the employee, the employer may or may not also make a contribution, and the investments are higher-risk. During the recent recession, workers with a DCP lost on average 25% of their retirement savings. According to an article in The Atlantic, “Of the 18 million workers aged between 55 and 64 in 2012, 4.3 million will be poor or near poor by the time they’re 65. And if current trends continue between 2013 and 2022, the number of poor or near-poor 65-year-olds will increase by 146 percent.”
Here in Wisconsin, there is a solution currently before our state legislature. Last year, Senator Dave Hansen (D-Green Bay) introduced The Wisconsin Private Secure Retirement Act, which would set up a pension fund for private sector employees, small businesses and farmers that would parallel the public WRS system. This would be a Defined Benefit Fund, and provide reliable retirement benefits to enrollees. Enrollment would be voluntary for employees. In a press release describing the bill, Senator Hansen said, “Our plan would put a simple, low-cost, low-risk retirement plan in reach of those who need it most. Under our plan no one will have to be an expert money manager to know that they too can enjoy a secure retirement”
Senator Hansen will reintroduce the bill in the coming legislative session. It is not a universal panacea – it still will not address the retirement security of low-income Americans. But it will help millions of Wisconsin workers save for a secure retirement. Please join in support for this important legislation!
Exodus 20: 12 - Honor your father and your mother that you may long endure on this land that the Eternal your God is assigning to you. (JPS TaNaKh)
If you are like millions of other Americans, the answer to the above question is most likely “No, not even close.” As people of faith, we are taught the value of respecting and caring for our elders. But the reality is millions of hard-working Americans have little or no retirement savings. How are we honoring our mothers and fathers if we are standing by while so many are facing retirements in dire poverty? Nor is this only an issue for the elderly – among all age groups, retirement savings are woefully inadequate, often non-existent.
Sadly, 45% of U.S. households have no retirement savings at all. When averaging the savings of both those with and those without retirement accounts (pensions, 401k’s), the median savings for all households is a mere $2500; for those close to retirement, the median is $14,500. Women are 80% more likely than men to be impoverished at age 65 and older. Women age 75 to 79 are three times more likely.
For families of color, the situation is much worse. One out of two white households has less than $10,000 in retirement savings. For African Americans, it is three out of four households, and 4 out of 5 for Latino households.
Here in Wisconsin, a retirement crisis is looming. Half of Wisconsin households have NO retirement savings. 30% of Wisconsin seniors have only Social Security to rely on, and the average Social Security benefit in Wisconsin is $1,281 per month.
There are many reasons for the lack of retirement security. For low-income workers who struggle just to pay their weekly bills, saving money toward retirement is an impossible dream. For mid-to upper-income families, retirement security often depends on whether they have access to employer-sponsored pension funds.
In Wisconsin, public employees participate in the Wisconsin Retirement System (WRS), which is a Defined Benefit Plan (DBP), which is provided by the employer, has low fees, low-risk because investments are pooled, and guaranteed income upon retirement. However, only 12% of Wisconsinites belong to this system.
For most people, in Wisconsin and around the country, if they have any retirement plan at all, it is a Defined Contribution Plan (DCP) – usually a 401k account. The fees are considerably higher than a DBP, contributions come from the employee, the employer may or may not also make a contribution, and the investments are higher-risk. During the recent recession, workers with a DCP lost on average 25% of their retirement savings. According to an article in The Atlantic, “Of the 18 million workers aged between 55 and 64 in 2012, 4.3 million will be poor or near poor by the time they’re 65. And if current trends continue between 2013 and 2022, the number of poor or near-poor 65-year-olds will increase by 146 percent.”
Here in Wisconsin, there is a solution currently before our state legislature. Last year, Senator Dave Hansen (D-Green Bay) introduced The Wisconsin Private Secure Retirement Act, which would set up a pension fund for private sector employees, small businesses and farmers that would parallel the public WRS system. This would be a Defined Benefit Fund, and provide reliable retirement benefits to enrollees. Enrollment would be voluntary for employees. In a press release describing the bill, Senator Hansen said, “Our plan would put a simple, low-cost, low-risk retirement plan in reach of those who need it most. Under our plan no one will have to be an expert money manager to know that they too can enjoy a secure retirement”
Senator Hansen will reintroduce the bill in the coming legislative session. It is not a universal panacea – it still will not address the retirement security of low-income Americans. But it will help millions of Wisconsin workers save for a secure retirement. Please join in support for this important legislation!
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