Saying America is facing a “retirement crisis,” Iowa Senator Tom Harkin is proposing legislation to create a new way for people to sock away money for their golden years. Harkin, a Democrat, says a new study has found workers across the country simply aren’t saving enough green for when they turn gray.
“The retirement income deficit, that is, the difference between the savings that people need in retirement and what they’ve actually saved, has grown to a staggering $6.6-trillion,” Harkin says. “That’s the difference between what people are going to need and what they’ve actually saved. Half of Americans have less than $10,000 in savings.”
He says Iowans have saved only 32-percent of what they will likely need for retirement, ranking the state toward the bottom. Harkin blames the situation on what he calls the breakdown of the traditional three-leg stool of retirement security — Social Security, pensions, savings.
His new proposal is called the U.S.A. Retirement fund, standing for universal, secure and adaptable. “Businesses could offer this to their employees to provide a secure source of retirement income for life without the businesses taking on the investment, management and longevity risks,” Harkin says.
“In addition, I propose reforms, fully paid for, that would increase Social Security benefits and make the program stronger for future generations.” He thinks the measure can win support in Congress.
“The good news is that retirement security has long been an area of significant bipartisan concern,” Harkin says. “I am hopeful and confident that I can work with my colleagues on both sides of the aisle to advance this plan and to make real progress in the months ahead to establish a new retirement system in America.”
Harkin announced last weekend that he will not seek reelection when his term expires in 2014. A reporter asked about the fact Harkin’s introducing major retirement legislation a matter of days after announcing his own retirement. It’s coincidence, Harkin says, as he’s been working on the legislation for several years.