Our Views: Low assets for future

In 2013, the Employee Benefit Research Institute reported a staggering statistic: 46 percent of American workers had less than $10,000 saved for retirement. Around half of all workers and the majority of part-time workers didn’t receive any retirement benefits at all from their employer, being purely dependent on their own savings.

It is these kinds of policy time bombs that have led President Barack Obama to propose a plan to allow savers to invest in government savings bonds.

The small sums would be rolled over into an IRA once reaching a balance of $15,000, according to the president’s plan.

For savers, the upside is that such an account isn’t likely to lose money, unless the government’s finances absolutely collapse, so it’s probably not a bad idea. If nothing else, it gets people of more modest incomes, the 46 percent cited above, into the habit of saving through easy payroll deductions.

What is desperately needed is personal responsibility for investing toward retirement.

Another study shows that while the popular 401(k) accounts have a record amount of money in them, there are tons of people who have cashed out early, particularly when changing jobs. A study by Fidelity Investments said that of roughly 800,000 workers with Fidelity accounts who left a job in the first nine months of 2013, 35 percent cashed out their 401(k) balances, as opposed to leaving the money in their former employer’s plan or rolling it into a new 401(k) or IRA.

And while that’s not a higher percentage than usual, it robs those future retirees of significant increases in future savings.

What all this means? That staggering 46 percent is not the only problem, as those with inadequate retirement accounts are unlikely to be able to afford, even with Social Security, a decent standard of living in retirement.