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Retirement Crisis


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Retirement Crisis

Floor SpeechBy: Elizabeth Warren

Date: Nov. 18, 2013

Location: Washington, DC

Ms. WARREN. Mr. President, I rise today to talk about the retirement crisis in this country--a crisis that has received far too little attention and far too little response from Washington.

 

I have spent most of my career studying the economic pressures on middle-class families--families who worked hard, who played by the rules, but who still found themselves just hanging on by their fingernails. Starting in the 1970s, even as workers became more productive, their wages flattened, while core expenses such as housing and health care and sending their kids to college kept going up.

 

Working families did not ask for a bailout. Instead, they rolled up their sleeves. They sent both parents into the workforce. But that meant higher childcare costs, a second car, and higher taxes. So they tightened their belts more, cutting spending wherever they could.

 

Adjusted for inflation, families today spend less than they did a generation ago on food, clothing, furniture, appliances, and other flexible purchases. When that still was not enough to cover rising costs, they took on debt--credit card debt, college debt, debt just to pay for the necessities.

 

As families became increasingly desperate, unscrupulous financial institutions were all too happy to chain them to financial products that got them into even more trouble--products where fine print and legalese covered the true costs of credit. These trends are not new. There have been warning signs for years about what is happening to our middle class.

One major consequence of these increasing pressures on working people--a consequence that receives far too little attention--is that the dream of a secure retirement is slowly slipping away.

 

A generation ago, middle-class families were able to put away enough money during their working years to make it through their later years with dignity. On average, they saved about 11 percent of their take-home pay while working. Many paid off their homes, got rid of all their debts, and retired with strong pensions from their employers. And when pensions, savings, and investments fell short, they could rely on Social Security to make up the difference.

That was the story a generation ago. Since that time the retirement landscape has shifted dramatically against our families. Among working families on the verge of retirement, about a third have no retirement savings of any kind and another third have total savings that are less than a year's annual income. Many seniors have seen their housing wealth shrink as well. According to AARP, in 2012, one out of every seven older homers was paying down a mortgage that was higher than the value of their house.

 

And just as they need to rely more than ever on pensions, employers are withdrawing from their traditional role in helping provide a secure retirement. Two decades ago, more than a third of all private sector workers--35 percent--had traditional defined benefit pensions--pensions that guaranteed a certain monthly payment that retirees knew they could depend on. Today that number has been cut in half. Only 18 percent of private sector workers have defined benefit pensions.

 

Employers have replaced guaranteed retirement income with savings plans, such as 401(k) plans, that leave the retiree at the mercy of a market that rises and falls and sometimes at the mercy of dangerous investment products. These plans often fall short of what retirees need and nearly half of all American workers do not even have access to those limited plans. This leaves more than 44 million workers without any retirement assistance from their employers.

Add all of this up--the dramatic decline in individual savings and the dramatic decline of guaranteed retirement benefits and employer support in return for a lifetime of work--and we are left with a retirement crisis, a crisis that is as real and as frightening as any policy problem facing the United States today.

 

With less savings and weaker private retirement protection, retirees depend more than ever on the safety and reliability of Social Security. Social Security works. No one runs out of benefits and the payments do not rise or fall with the stock market. Two-thirds of seniors rely on it for the majority of their income in retirement, and for 14 million seniors--14 million--this is the safety net that keeps them out of poverty. God bless Social Security.

 

And yet even Social Security has been under attack. Monthly payments are modest, averaging about $1,250, and over time those benefits are shrinking in value. This puts a terrible squeeze on seniors.

 

With tens of millions of people more financially stressed as they approach retirement, with more and more people left out of the private retirement security system, and with the economic security of our families unraveling, Social Security is rapidly becoming the only--only--lifeline that millions of seniors have to keep their heads above water. And yet instead of taking on the retirement crisis, instead of strengthening Social Security, some in Washington are fighting to cut benefits.

Just this morning the Washington Post ran ahttp://thomas.loc.govn editorial mocking the idea of a looming retirement crisis. To make sure no one missed the point, they even put the words ``retirement crisis'' in quotation marks.

 

No retirement crisis? Tell that to the millions of Americans who are facing retirement without a pension. Tell that to the millions of Americans who have nothing to fall back on except Social Security. There is a $6.6 trillion gap between what Americans under 65 are currently saving and what they will need to maintain their standard of living when they hit retirement. Mr. President, $6.6 trillion--and that assumes that Social Security benefits are not cut. Make no mistake, there is a crisis.

 

The call to cut Social Security has an uglier side to it too. The Washington Post framed the choice as more children in poverty versus more seniors in poverty. The suggestion that we have become a country where those living in poverty fight each other for a handful of crumbs tossed off the tables of the very wealthy is fundamentally wrong. This is about our values, and our values tell us that we do not build a future by deciding first who among the vulnerable will be left to starve.

Look at the basic facts. Today Social Security has a $2.7 trillion surplus. If we do nothing, Social Security will be safe for the next 20 years and even after that will continue to pay most benefits. With some modest adjustments, we can keep the system solvent for many more years--and we could even increase benefits.

 

The tools to help us build a future are available to us now. We do not start the debate by deciding who gets kicked to the curb. We are Americans. We start the debate by figuring out how to create better efficiencies, how to make small changes that will make the system fairer, how to grow the pool of those who contribute, and how to rebuild the system that every single one of us can rely on to make sure there is a baseline in retirement that no one falls below.

 

We do not build a future for our children by cutting basic retirement benefits for their grandparents. No. We build a future for our kids by strengthening our economy, by investing in education and infrastructure and research, by rebuilding a strong and robust middle class in which every kid gets a chance and the most vulnerable have a strong safety net.

The most recent discussion about cutting benefits has focused on something called the chained CPI. Supporters of the chained CPI say it is a more accurate way of measuring the cost-of-living increases for seniors. That statement is simply not true. Chained CPI falls far short of the actual increases in costs that seniors face. Pure and simple, chained CPI is just a fancy way to say cut benefits.

 

The Bureau of Labor Statistics has developed a measure of the real impact of inflation on seniors. It is called the CPI-E. If we adopt it today, it would generally increase the benefits for our retirees, not cut them. Social Security is not the answer for all of our retirement problems. We need to find a way to tackle the financial squeeze that is crushing our families. We need to help families start saving again. We need to make sure more workers have access to better pensions. But in the meantime, so long as those problems continue to exist and as long as we are in the midst of a real and growing retirement crisis, a crisis that is shaking the foundations of what was once a vibrant and secure middle class, the absolute last thing we want to do is cut Social Security benefits. The absolute last thing we should do in 2013, at the very moment that Social Security has become the principal lifeline for millions of our seniors, is allow the program to be dismantled inch by inch.

Over the past generation, working families have been hacked at, chipped, and hammered. If we want a real middle class, a middle class that continues to serve as the backbone of our country, then we must take the retirement crisis seriously. Seniors have worked their entire lives and have paid into this system. But right now more people than ever are on the edge of financial disaster once they retire. The numbers continue to get worse. That is why we should be talking about expanding Social Security benefits, not cutting them.

 

Senator Harkin from Iowa, Senator Begich from Alaska, Senator Sanders from Vermont, and others have been pushing hard in that direction. Social Security is incredibly effective. It is incredibly popular. The calls for strengthening it are growing louder day by day.

 

The conversation about retirement and Social Security benefits is not a conversation just about math. At its core this is a conversation about our values. It is a conversation about who we are as a country and who we are as a people. I believe we honor our promises. We make good on a system that millions of people paid into faithfully throughout their working years. We support the right of every person to retire with dignity.

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Retirement Crisis

Floor SpeechBy: Elizabeth Warren

Date: Nov. 18, 2013

Location: Washington, DC

 

Ms. WARREN. Mr. President, I rise today to talk about the retirement crisis in this country--a crisis that has received far too little attention and far too little response from Washington.

 

I have spent most of my career studying the economic pressures on middle-class

 

 

 

There is a problem right there spent most of your career studying? Wtf when did you earn a living by working?

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Pocahontas Warren

Nothing Pocahontas says can be taken for the truth. She claimed she was part indian to embellish her credentials for a job at Harvard. Just another Mass. Dem. political hack. This state is full of them. Last three speakers of the house indicted. State senator in jail. The more you lie the higher you rise in the Mass. political system. Pocohantas has risen to the top. US senator. Mass is the perfect example of a Dem. one party state. Money and people leaving the state and being replaced with illegals. Welfare fraud out of control. Gov. Deval Patrick has his eye on the presidency. So does Pocohantas.

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When the 401K came into being Jan 1, 1980 I put every dime that was allowed into one, when I left the corporate world in Sept 1996 to start my own business it was worth slightly over 750,000.

 

What is the problem?????????????????????????

 

The problem is back in 1980 people had money to put into a 301K. Today they don't and for those that do the rate of return is not what it used to be and add to that people like Bernie Madoff ripping people off and bankers getting away with it. When costs of basic living go up more than a persons pay, where do they find the money to put into a 401K. By the way have you thanked Bill Clinton for the growth of your 401K?.

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When the 401K came into being Jan 1, 1980 I put every dime that was allowed into one, when I left the corporate world in Sept 1996 to start my own business it was worth slightly over 750,000.

 

What is the problem?????????????????????????

Well my problem as of now

My annuity isn't drawing any interest...

Was your 401 matched by the business you were working at?

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There are 8 levels of control that must be obtained before you are able to create a social state.

 

1. Healthcare: Control healthcare and you control the people

 

2. Poverty: Increase the Poverty level as high as possible; poor people are easier to control and will not fight back if you are providing everything for them to live.

 

3. Debt: Increase the debt to an unsustainable level. That way you are able to increase taxes, and this will produce more poverty.

 

4. Gun Control: Remove the ability to defend themselves from the Government. That way you are able to create a police state.

 

5. Welfare: Take control of every aspect of their lives (Food, Housing, and Income).

 

6. Education: Take control of what people read and listen to and take control of what children learn in school.

 

7. Religion: Remove the belief in the God, from the Government and schools. Make them worship the Government, not God.

 

8. Class Warfare: Divide the people into the wealthy and the poor. This will cause more discontent and it will be easier to tax the wealthy with the support of the poor.

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The problem is back in 1980 people had money to put into a 301K. Today they don't and for those that do the rate of return is not what it used to be and add to that people like Bernie Madoff ripping people off and bankers getting away with it. When costs of basic living go up more than a persons pay, where do they find the money to put into a 401K. By the way have you thanked Bill Clinton for the growth of your 401K?.

 

And that would be due to the Federal Reserve Bank's ZERO INTEREST RATE POLICY (ZIRP)

 

See what happens when you dummocrats insist on printing money like crazy and devaluing the currency.

But hey, at least the magic negro has the teleprompter to promise more free shit to get votes with that newly created money.

 

Free healthcare! Free stimulus! Free condoms! Free Obamaphones! Free cash for clunkers! Free green energy!

 

Free green shoots and shovel ready projects!!!!!!!!!!!!!!!!!! Free money!!!

 

Nothing is free. You're just figuring that out??? LEARN ECONOMICS.

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