A panel of experts on retirement testified before the Senate Committee on Banking, Housing & Urban Affairs this week to address the question of whether the middle class can afford to retire.
Given the increasing shortcomings of traditional retirement plans such as 401(k)s and IRAs, as well as the growing pressures on the future of Social Security, more Americans will have to bolster their savings with additional sources of income, said Monique Morrissey, an economist at the nonpartisan Economic Policy Institute.
“Most Americans approaching retirement have little or nothing saved in retirement accounts. In 2010, 40 percent of families in their peak savings years (ages 55 to 64) had nothing saved in retirement accounts and 10 percent had $12,000 or less,” she stated.
“Though the median amount for families with savings was $100,000, this is not even enough to purchase $5,000 a year joint life annuity starting at age 65.”
Another witness was Kristi Mitchem of State Street Global Advisors, which handles $2.3 trillion in assets, including more than $305 billion in retirement plans assets.