WASHINGTON, D.C. - Rep. Richard E. Neal (D-MA) made the following opening statement today a hearing by the Ways and Means Subcommittees on Select Revenue Measures on the role of individual retirement accounts:
“I call this hearing to order. Please take your seats.
“I want to welcome everyone to this hearing on the role of individual retirement accounts, or IRAs, by the Select Revenue Measures Subcommittee.
“You have probably heard of the three-legged stool meant to prop up retirees in their golden years -- that is, Social Security, pensions, and savings. Without one leg, that stool will be hard to sit on. Today, we will be discussing personal savings, and why the national savings rate continues to decline. As you can see from the slide being displayed now, our personal savings rate has declined over the decades to a paltry one-half of one percent since 2005.
“IRAs have existed for decades now, with the hopes that those without employer plans would save on their own, and yet we are still faced with underutilization by the intended targets. GAO recently projected that 37% of all workers will retire with zero plan savings, and that of young and low-income workers, 63% will have no plan savings at retirement. Clearly, we must do more to foster personal savings.
“We must begin to think more creatively and use innovation to capture this group of workers who are not saving. One of these vehicles is the Auto-IRA, which Mr. English and I have sponsored here in the House. With 75 million workers with no access to a workplace retirement plan, and only 10% of these workers saving on their own, clearly the current incentives are not working.
“Today’s hearing will explore these issues and other ideas to reach out to those who should be saving more.
“As George Foreman observed, “The question isn`t at what age I want to retire, it’s at what income." If only we all had this same observation in our 20’s, we wouldn’t be fighting so hard to save in our 50’s."
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