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9/22/2017 12:11:25 AM
Posted: 9/16/2010 5:01:42 AM EDT

A new study obtained by CNBC says Americans are $6.6 trillion short of what they need to retire.

The study, conducted by Boston College's Center for Retirement Research, says savings have been squeezed by declines in stock and housing values.

The study was commissioned by Retirement USA, a coalition of organized labor and pension rights advocates that hopes to use the study to push for a more stable retirement system. The group plans to unveil the study at a news conference in Washington on Wednesday.

The $6.6 trillion figure is based on projections of retirement and income for American workers ages 32-64. The study's authors say they arrived at the amount using conservative assumptions, including a 3 percent rate of return on assets and no further cuts in pension coverage or increases in the Social Security retirement age.

"Using other assumptions, it could be much higher," said Maria Freese, Director of Government Relations and Policy for the National Committee to Preserve Social Security and Medicare. For example, the study notes, if the rate of return matches the return on U.S. Treasury Inflation-Protected Securities (TIPS), currently 1.87 percent, the deficit balloons to $7.9 trillion.

This announcement comes on the heels of other sobering news: Milliman Inc., a Seattle-based actuarial and consulting firm, reported this week that the funded status of the 100 largest corporate defined benefit pension plans dropped by $108 billion during August 2010.

This comes amid recent reports indicating that a White House-created panel is considering proposals to cut Social Security benefits and raise the retirement age.

Keep a close eye on these guys, they (Retirement USA was founded by the AFL-CIO and SEIU) are pushing a union pension bailout through a mandatory universal retirement plan. The Democrats have been launching trial balloons on this for two years now, they want to force everyone into a federally administered pension plan more or less replacing (by which I mean phasing out, not seizing existing funds... probably) pensions, 401(k)'s and other private retirement accounts.

Teresa Ghilarducci, whose plan is highlighted on their website, has specifically said that 401(k)'s would have to be phased out, participation would have to be mandatory and 100%, and the plan's income would have to be redistributed (wealthy participants paying for poor participants). From Retirement USA's website (linked above):
Guaranteed Retirement Account Plan, presented by Teresa Ghilarducci. The GRA proposal mandates a contribution of five percent of earnings (up to the Social Security wage base) for all workers – evenly divided between employer and employee. The employee’s share of the contribution would be offset by a $600 refundable tax credit, which would completely cover the contribution obligation of an employee with income up to $24,000. The contributions of husbands and wives would be combined and divided equally between their individual accounts.

The plan would provide for a guaranteed real three percent annual rate of return adjusted for inflation. If actual investment returns are consistently higher than three percent inflation-adjusted over a number of years, the trustees of the plan could distribute a surplus to GRA participants. A balancing fund would be maintained to ride out periods of low investment returns.

Account balances would be converted to inflation-adjusted annuities upon retirement, with a partial (10%) lump sum available. A full-time worker who contributes into the plan for 40 years and retires at age 65 can be expected to receive income equal to roughly 25 percent of pre-retirement income. The plan would also provide a death benefit of one-half the account balance for participants who die before retiring. Those who die after retirement could bequeath to their heirs half their final account balance less the total of benefits received.

They list several other proposals now (to muddy the water, in my opinion), but the Ghilarducci plan is the gist of their original mission statement, since removed from the site- create a universal, mandatory, and redistributive federally administered retirement program to rescue pensions. Ghilarducci has been one of the most prominent faces of this effort, she's given numerous press interviews and has appeared at several Congressional hearings.

Not unrelated, in my opinion, is an Obama administration proposal to create a special 3% retirement treasury bond. Say, isn't that the same as the "guaranteed" return on Ghilarducci's plan? Yes, it is. And what could be safer than lending money to the government? In fact, Ghilarducci has stated quite specifically that the universal retirement plan must invest in treasury bonds. In short- Ghilarducci's plan will be designed to force you to "lend" retirement savings to the federal government, while taking "excess" savings from you and giving it to the less fortunate.

The bitch of it is, their retirement savings estimate probably is on the conservative side: 2005, pre recession- "the median retirement account holds $2,000" (careful, many articles use "average" which is distorted by a relative few enormous accounts). The Illinois state pension plan is 50% underfunded, and that's ignoring the fact that the state's last few payments were made with money borrowed through a special bond issue. Most other state and union plans are in one stage of distress or another. Which means a federal rescue will be very, very appealing to a whole lot of voters in the near future.

With their other plans stubbornly unpopular, and little else to run on, I believe this could grow to be the centerpiece of the Democrat's 2012 campaign. If not 2012, then expect to see more of it very soon- and be prepared to fight it.
Link Posted: 9/16/2010 5:06:16 AM EDT
Heard about this yesterday. Get ready for a bailout. Govt pensions need shut down and put into the private sector like everyone else.
Link Posted: 9/16/2010 5:31:42 AM EDT
The "less fortunate" can eat a dick. I'm so sick and fucking tired of hearing about the "poooor" and how they need help. Fuck 'em. I'm not my brother's keeper.
Link Posted: 9/16/2010 5:45:57 AM EDT

Originally Posted By metalsaber:
Heard about this yesterday. Get ready for a bailout. Govt pensions need shut down and put into the private sector like everyone else.

It's not a bailout , they want to take everyone's 401k and non govt retirements and throw them into a rebranded version of social security.

Social security is about ready to run out , and the only way they can do it effectively is to take everyone's private retirement.
Link Posted: 9/16/2010 6:26:23 AM EDT
Looks like my retirement plan of working until I die is still on track.
Link Posted: 9/16/2010 6:28:30 AM EDT
I wonder if there will eventually be a massive group of retirees with no pension, nothing to lose, and a desire to kick ass and chew bubblegum.

They will be all out of gum.

Link Posted: 9/16/2010 6:35:18 AM EDT
My personal retirement would be in increadible shape if I could personally invest the Social Security money being "put away for me".
Link Posted: 9/16/2010 6:38:29 AM EDT
Originally Posted By ABNAK:
The "less fortunate" can eat a dick. I'm so sick and fucking tired of hearing about the "poooor" and how they need help. Fuck 'em. I'm not my brother's keeper.

That's a red herring.........unions want for themselves....they could care less about anyone else IMHO.
Link Posted: 9/16/2010 6:45:40 AM EDT
[Last Edit: 9/16/2010 6:46:36 AM EDT by AC_Doctor]
Bwaaaahhaaaa, another bailout request by the Unions. Who would have figured. The dollar will be worthless in 2-3 years so who gives a shit. Little Timmy's gonna have to order a tanker ship full of Chinese printing presses to print more worthless money...

Link Posted: 9/16/2010 6:59:25 AM EDT
We need to watch this very closely...
Link Posted: 9/16/2010 7:03:24 AM EDT
If you don't think the .gov will steal all that is there before they go bankrupt, you got an other thing coming.

Link Posted: 9/16/2010 7:13:53 AM EDT
Originally Posted By Ameshawki:
Looks like my retirement plan of working until I die is still on track.

same here
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