Members of the baby boom generation have to worry not only about saving for retirement but also about outliving what savings they have.

Witnesses delivered that message here earlier this week at a hearing of the Senate Special Committee on Aging.

The issue of retirement savings–or lack thereof–is not a new one, and 2005 marked the first year since the Great Depression that the nation’s savings rate was a negative percentage for an entire calendar year. The personal savings rate remains negative, according to the committee chairman,

Sen. Gordon Smith, R-Ore., the committee chairman, noted that the U.S. personal “savings” rate was negative 1.6% in April, meaning that consumers were drawing on their savings rather than adding to their savings.

“There are about 77 million baby boomers,” said Ben Stein, a television personality and financial columnist who is the honorary spokesperson for the National Retirement Planning Coalition, a group of 13 financial and health care industry organizations founded by the National Association for Variable Annuities, Reston, Va. “Their average savings are far below what is needed for a comfortable or even decent retirement.”"

The average baby boomer family has roughly $50,000 in liquid assets when members retire, and “that’s not even remotely close [to what is needed],” Stein said.

C. Robert Henrikson, chairman of MetLife Inc., New York, said seniors are in dire straits when facing retirement.

Although Americans are living longer on average, many “will not live long and prosper,” Henrikson said.

Although many Americans use 401(k) plans to save for retirement, the plans “have not yet proved to be successful, which means providing income and security for an entire generation,” Henrikson says.

Managing investment risk is difficult even for the professionals who run defined benefit pension plans, and “an individual attempting to manage that risk himself is attempting the near impossible,” Henrikson argued.

Instead, Henrikson said, workers should be encouraged to join risk pools for their retirement planning.

Forming risk pools would provide the advantage of scale enjoyed by defined benefit plan managers while easing workers’ retirement risk-management burden.

“It’s a solution for retirees that have diligently saved,” Henrikson said, repeating that “no individual, no matter how smart or savvy, can go it alone.”

Stein proposed encouraging seniors to buy annuities, which would help provide a stream of income beyond Social Security payments.

“The annuity, whether fixed or variable, provides income that by definition will last until the holder of the annuity has entered a place where money is, presumably, not needed,” Stein said.

Stein recommend improving the tax status of annuities.

“While the investments in them compound tax free, the contingent gains from interest, dividends and capital gains are taxed at ordinary income rates as withdrawn,” Stein said. “This is in stark contrast to other investments in non-tax favored investments, which actually can have lower tax rates than annuities which are supposedly tax-favored.”