Saving becomes a campaign issue
A dawning reality that millions of workers face an income squeeze when they retire has elevated building a nest egg to the national political agenda.
WASHINGTON — Move over jobs, war, healthcare and immigration. There's a new issue on the presidential campaign trail: retirement security.
In a sign of changing times, a dawning reality that millions of workers face an income squeeze when they retire has elevated the once-personal matter of building a nest egg to the national political agenda.
Leading Democratic candidates are calling for savings programs -- unrelated to Social Security -- targeted to moderate-income households, greased with matching tax credits and powered through payroll deductions. Republicans have avoided that strategy, instead putting their faith in tax cuts and policies that fuel economic growth as ways to promote new saving.
"The problem of inadequate retirement saving continues to fester and grow," said Mark Iwry, a former Treasury Department official who has advised the campaigns of Sens. Barack Obama (D-Ill.) and Hillary Rodham Clinton (D-N.Y.) on the issue. "Its urgency is increasing."
Concerns are fueled by a combination of events that affect millions of households. Traditional pensions that paid a set amount for life are being phased out in many workplaces. The 401(k) savings plans that have replaced them do not assure enough to retire on, except for those who have saved carefully for many years. They are also vulnerable to the kind of sharp market downturns that rattled Wall Street last week.
Almost 1 in 2 workers -- 48% -- have less than $25,000 in savings, and 71% have less than $100,000, according to a 2007 survey by the Employee Benefit Research Institute.
On top of that, more than 75 million Americans, or roughly half the workforce, have no opportunity to participate in a retirement plan. Experts say that many of them are headed for a bleak future.
Signs that the late-life safety net is fraying come as more Americans live into their 80s and 90s, increasing the risk that they will outlast their savings, and as the oldest members of the baby boom generation advance into their 60s.
"The issue of savings, not just on a personal level but for the country as a whole -- do we as a nation save enough money? -- those issues dramatically cut across party lines," said Austan Goolsbee, a University of Chicago economist who is advising Obama.
The partisan division looms wide in the presidential campaign, however. Republicans generally oppose new mandates on private employers, and they have not specifically targeted savings initiatives at the lower end of the ladder.
