Americans are having a hard time handling their finances.[@@]

Witnesses delivered that message here today at a hearing on financial literacy organized by House Financial Services Committee Chairman Michael Oxley, R-Ohio.

Retirement savings experts such as Dallas Salisbury, president of the Employee Benefit Research Institute, Washington, talked about American workers’ low savings rate and penchant for investing in money market accounts that generate little or no return.

Sheryl Garrett, a financial planner from Mission, Kan., also talked about clients’ debts.

Today, some mortgage lenders “are in the foreclosure business, rather than the lending business,” Garrett said, according to a written version of her remarks. “Not long ago, one could only qualify for a mortgage if their total housing expenses did not exceed 28 to 31% of their gross income. Now, I am hearing about people taking out mortgages 8 to 10 times their annual salary. They CAN NOT afford this mortgage, yet they have ?qualified’ for it. Nearly all of their paycheck will go to pay this debt.”

Garrett also talked about the need for Americans who can continue to work past age 65 to do so.

“In my planning projections, I assume life expectancy to be no less than age 100,” Garrett said.

For most people, planning to retire at 65 and to save enough to support the cost of living more than 30 years in retirement is unrealistic, Garrett said.

“Why are we surprised that we cannot afford to maintain our standard of living when we spend as much time in retirement as we did in the workforce?” Garrett asked. “One of the healthiest developments I am seeing with individuals’ personal financial planning is that they are planning to work longer or to enter into a staged retirement.”

Like the other witnesses, Garrett recommended that Congress look for ways to set up automatic savings and investment programs for workers, or programs that require employee action to change contribution levels and asset-allocation arrangements.

The Financial Services Committee has posted the text of Garrett’s testimony and the statements delivered by other hearing witnesses at http://financialservices.house.gov/hearings.asp?formmode=detail&hearing=375