Maximize Your 401k Benefits: The Best Way to Boost Retirement Savings
Last July, Senator Tom Harkin, Chairman of the U.S. Senate Committee on Health, Education, Labor & Pensions, issued a report called “The Retirement Crisis and a Plan to Solve It.” In it, he outlined the findings of a series of hearings held by the committee on the retirement crisis that has crept over America like rust over the past few years.
Highlighting just a few troubling facts, Harkin points out that, in aggregate, Americans currently hold a $6.6 trillion retirement deficit. One of only five people in the private sector workforce have a define benefit pension plan, and half of Americans have less than $10,000 in savings. Anecdotal evidence curated through surveys finds that 92 percent of people believe there is a retirement crisis in America.
What’s more, just 4 percent of employers are “very confident” that their employees will retire with sufficient assets. This is down from 30 percent in 2011. Only 14 percent of people believe they will have enough money to live comfortably in retirement. Harkin articulates the idea of the three-legged stool of retirement security — defined pension plans, personal savings, and Social Security — and reveals how each has been eroded and undermined over time.
With this in mind, it has become clear that individuals will need to take a more proactive approach to retirement savings. Social Security will not be enough — if it is even still around in the not-too-distant future — and employee benefits plans are, unfortunately, a job perk that most Americans are forced to live without. This leaves personal savings as the one leg of the stool that individuals can reinforce through fiscal responsibility and good decision making.