The Congressional Joint Economic Committee (JEC), vice-chaired by U.S. Rep. Carolyn Maloney (D-Greenpoint, Manhattan, Queens), released a report analyzing retirement insecurity on the 84th anniversary of the Social Security Act.
The report, which can be found here, stresses that while Social Security protects people from poverty, only a small amount of Americans have other sources of retirement security and that “the rest of our retirement system is in crisis.”
According to the report, less than half of wage earners have defined contribution accounts such as 401(k)s and one-third of near-retirees lack a defined benefit pension or contribution plan.
In the 1980s, around 30 percent of Americans were at risk of meeting their standard of living in retirement. Today, the report finds, the number is around 50.
President Franklin D. Roosevelt signed the Social Security Act into law on August 14, 1935. It has been a major part of retirement security for Americans since then, but was nevertheless considered only one part of the so-called “three-legged stool”, a term which refers to the combination of Social Security, pensions and private savings.
According to the report, that “three-legged stool” has been weakened.
“Despite Social Security’s success, the other two major components of our nation’s retirement system – private savings and pensions – are failing hardworking Americans. As a result, roughly half of Americans are at risk of losing their current standard of living in retirement,” said Maloney.
Read the full article here.