"A new research report finds that the retirement savings levels of working age Americans remain deeply inadequate despite economic recovery"-National Institute on Retirement Security

WASHINGTON, D.C., SEPTEMBER 17, 2018 – A new research report finds that the retirement savings levels of working age Americans remain deeply inadequate despite economic recovery. An analysis of U.S. Census Bureau data reveals that the median retirement account balance among all working individuals is $0.00. The data also indicate that 57 percent (more than 100 million) of working age individuals do not own any retirement account assets in an employer-sponsored 401(k)-type plan, individual account or pension. 

The analysis finds that overall, four out of five working Americans have less than one year’s income saved in retirement accounts. Also, 77 percent of Americans fall short of conservative retirement savings targets for their age based on working until age 67, even after counting an individual’s entire net worth – a generous measure of retirement savings. Moreover, a large majority of working Americans cannot meet even a substantially reduced savings target.

Growing income inequality widens the gap in retirement account ownership. Workers in the top income quartile are five times more likely to have retirement accounts than workers in the lowest income quartile. And those Individuals with retirement accounts have, on average, more than three times the annual income of individuals who do not own retirement accounts.

These findings are contained in a new research report, Retirement in America | Out of Reach for Most Americans? The report is issued today by the National Institute on Retirement Security (NIRS), and is available here.

A webinar to review the findings is scheduled for Thursday, September 20, 2018, at 11 AM ET. Register here.

“The facts and data are clear. Retirement is in peril for most working-class Americans,” says Diane Oakley, report author and NIRS executive director. “When all working individuals are considered — not just the minority with retirement accounts — the typical working American has zero, zilch, nothing saved for retirement.”

Oakley added, “What this report means is that the American dream of a modest retirement after a lifetime of work now is a middle-class nightmare. Even among workers who have accumulated savings in retirement accounts, the typical worker had a low account balance of $40,000. This is far off-track from the savings levels Americans need if they hope to sustain their standard of living in retirement.” 

The retirement savings shortfall can be attributed to a multitude of factors and a breakdown of the nation’s retirement infrastructure. There is a massive retirement plan coverage gap among American workers, fewer workers have stable and secure pensions, 401(k)-style defined contribution (DC) individual accounts provide less savings and protection, and jumps in Social Security retirement age translate into lower retirement income.   

The catastrophic financial crisis of 2008 exposed the vulnerability of the DC-centered retirement system. Many Americans saw the value of their retirement plans plummet when the financial markets crashed and destroyed trillions of dollars of household wealth. Asset values in Americans’ retirement accounts fell from $9.3 trillion at the end of 2007 to $7.2 trillion at the end of 2008. The economic downturn also triggered a decline in total contributions to DC retirement accounts as many employers stopped matching employee contributions for a time pushing total contributions below 2008 levels. Since then, the combined value of 401(k)-type accounts and IRAs reached $16.9 trillion by the end of 2017. Unfortunately, this increase in total retirement account assets did not translate to improved retirement security for the majority of American workers and their families who have nothing saved.

In this uncertain environment, Americans face an ongoing quandary: how much income will they need to retire, and can they ever save enough? To maintain their standard of living in retirement, the typical working American needs to replace roughly 85 percent of pre-retirement income. Social Security, under the current benefit formula, provides a replacement rate of roughly 35 percent for a typical worker. This leaves a retirement income gap equal to 50 percent of pre-retirement earnings that must be filled through other means.

The key findings of this report are as follows:

·         Account ownership rates are closely correlated with income and wealth. More than 100 million working age individuals (57 percent) do not own any retirement account assets, whether in an employer-sponsored 401(k)-type plan or an IRA nor are they covered by defined benefit (DB) pensions. Individuals who do own retirement accounts have, on average, more than three times the annual income of individuals who do not own retirement accounts.

·         The typical working age American has no retirement savings. When all working individuals are included—not just individuals with retirement accounts—the median retirement account balance is $0 among all working individuals. Even among workers who have accumulated savings in retirement accounts, the typical worker had a modest account balance of $40,000. Furthermore, some 68 percent of individuals age 55 to 64 have retirement savings equal to less than one times their annual income, which is far below what they will need to maintain their standard of living over their expected years in retirement.

·         Three-fourths (77 percent) of Americans fall short of conservative retirement savings targets for their age and income based on working until age 67 even after counting an individual’s entire net worth—a generous measure of retirement savings. Due to a long-term trend toward income and wealth inequality that only worsened during the recent economic recovery, a large majority of the bottom half of Americans cannot meet even a substantially reduced savings target.

·         Public policy can play a critical role in putting all Americans on a path toward a secure retirement by strengthening Social Security, expanding access to low-cost, high quality retirement plans, and helping low-income workers and families save. Social Security, the primary underpinning of retirement income security, could be strengthened to stabilize system financing and enhance benefits for vulnerable populations. States across the nation are taking key steps to expand access to workplace retirement savings, with enrollment in state-based programs this year starting in Oregon, Washington and Illinois. Other proposals to expand coverage are on the national agenda but universal retirement plan coverage has not become a national priority. Finally, expanding the Saver’s Credit and making it refundable could help boost the retirement savings of lower-income families.

To understand the challenges working-class individuals face in retirement, the report provides an analysis of the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP) data released in 2016 and 2017. The study analyzes workplace retirement plan coverage, retirement account ownership, and retirement savings as a percentage of income, and estimates the share of workers that meet financial industry recommended benchmarks for retirement savings.

The National Institute on Retirement Security is a non-profit organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers, and the economy through national research and education programs. Located in Washington, D.C., NIRS has a diverse membership of organizations interested in retirement including financial services firms, employee benefit plans, trade associations, and other retirement service providers. More information is available at www.nirsonline.org

Contact: Kelly Kenneally 202.457.8190 o 202.256.1445 m kkenneally@nirsonline.org

“If you want to feel less stressed, become happier, and live longer: Start singing!”

“Music makes everything better! It can relieve pain, reduces stress, makes you work harder, and helps you relax. Music is one of life's most beautiful gifts. To quote Jimi Hendrix: ‘Music doesn't lie. If there is something to be changed in this world, then it can only happen through music.’

“One of the best ways to capture the benefits of music is through singing. It allows you to truly feel the song with your mind, body, and soul. Research has shown singing can improve your health, increase happiness and even extend your life! No matter who or where you are, you can reap the many benefits of music by singing along to some tunes! Sing wherever you are.

“Singing is even good for your brain and can make you feel high. It releases endorphins, hormones that produce pleasure, simultaneous to oxytocin, hormones that diminish stress and anxiety. Oxytocin also decreases feelings of depression and loneliness, making us feel more connected with the world, which is precisely why singing with other people feels even better!

“A study done by scientists at the University of Gothenburg in Sweden found people who sing together become so connected they exhibit synchronized heartbeats. Anyone who has ever been in choir can attest to this. When the magical sound of several people singing together is created, there is an unexplained unity between those singing.

“Singing also requires deep concentration on breathing, which works major muscle groups in the upper body and is great for both lung and cardiovascular health. Björn Vickhoff, the leader of the study, stated: ‘Song is a form of regular, controlled breathing, since breathing out occurs on the song phrases and inhaling takes place between these. It gives you pretty much the same effect as yoga breathing. It helps you relax, and there are indications that it does provide a heart benefit.’ Therefore, one could make the argument that singing is better for you than doing yoga! Research has also proven that singing produces lower levels of cortisol, reducing stress while improving our immune systems.

“Lastly, a joint study from Harvard and Yale Universities in 2008 found singing increases life expectancy. If you want to feel less stressed, become happier, and live longer: Start singing!” (New research says singing daily reduces stress, clears sinuses, and helps you live longer).

Despite the soaring costs of attending American colleges and universities, students are receiving an education that falls far short of the one experienced by earlier generations

“The sharp increase in costs is clear enough. Between 1978 and 2013, American college tuition rose by 1,120 percent, and became the major source of revenue for higher education. Traditionally, most public colleges and universities had no tuition or very low tuition. But, faced with severe cutbacks in government funding from conservative state legislatures, these public schools adopted a tuition system or dramatically raised tuition...

“This huge spike in the cost of a college education has had a devastating effect upon educational opportunity. Unable to afford college, many young people never attend it or drop out at some point. Studies have found that the primary reason young people cite for not attending college is its enormous cost. Many other young people can afford to attend college only by working simultaneously at paying jobs (which pulls them away from their studies) or by running up enormous debt. It is estimated that three out of four recent college graduates have borrowed to cover their college costs, incurring a debt averaging nearly $40,000 each. As a result, American student loan debt now totals $1.5 trillion.

“Coping with this enormous debt, plus substantial interest, constitutes a very heavy burden for the 44 million Americans who bear it. All too many of them either default on it or give up on their dreams for post-college careers and, to pay it off, settle, reluctantly, for working at jobs they dislike.

“Meanwhile, on campus, education is deteriorating. Those young people who can still afford to attend a college or university are increasingly being deprived of a broad liberal arts education (in which they have the opportunity to consider what life is all about and what it might be) and channeled, instead, into narrow vocational training programs.

“This June, the American Association of University Professors issued an appeal calling for the protection of the liberal arts in higher education. Why? Politicians like Governor Rick Scott of Florida have proposed singling out liberal arts majors―students he apparently considers particularly unworthy of public education―and charging them higher tuition at state universities.

“Governor Scott Walker of Wisconsin has proposed dropping the goals of ‘search for truth’ and ‘improve the human condition’ from the University of Wisconsin’s mission statement and substituting: ‘meet the state’s workforce needs.’

“Also, many students are taught in vast lecture halls and have little or no access to faculty members with whom they can discuss their coursework, interesting books or ideas, or the possibilities of attending graduate or professional school. Thanks to administrative efforts to dispose of tenured and tenure-line faculty, adjunct and other contingent faculty now constitute 76 percent of the nation’s college teachers. As these underpaid, rootless individuals are often little more than evanescent ghosts flitting by on campus, there are few opportunities to meet with them―if there is even a place to meet with them. And student contact with human beings will be further reduced in the future, as MOOCS (massive online open courses) are substituted for courses taught in classrooms―classrooms that once gave students the opportunity for a face-to-face discussion with their teachers and other students.

“The mistreatment of students is most advanced at America’s for-profit colleges and universities. These private enterprise institutions, often owned by giant banks and investment firms, underwent a surge of growth that started in the 1970s and probably reached its peak from 2007 to 2009, when they numbered nearly 1,000 and could boast about 2.4 million students. Enrolling large numbers of first generation, low-income college students, they became notorious for deceptive student recruitment practices, misleading claims about program credentials, high student debt and default rates, and inferior educational and employment outcomes. 

“The largest for-profit school, the University of Phoenix, which claimed an enrollment of 600,000 in 2010, incurred numerous government fines and payments to students who sued it for shady admissions and educational practices. By 2017, its enrollment (like that of its for-profit counterparts) had declined substantially. Nevertheless, it continues operations today, with 95 percent of its faculty teaching part-time, adjuncts receiving approximately $1,000 to $2,000 per course, and student debt totaling $35 billion―the highest in the United States.

“Corporate investors in the for-profit university system can take heart at the election of Donald Trump, who himself founded a for-profit educational entity, Trump University, an operation that ultimately cost him $25 million to settle lawsuits for fraudulent practices. 

“Betsy DeVos, his choice for U.S. Secretary of Education, scrapped two Obama-era government regulations for the industry during her first months in office. The first of the regulations she eliminated cut off U.S. government funding to programs that performed poorly, and the second made it easier for students defrauded by for-profit schools to wipe out their loan debt. DeVos also appointed a former administrator at a for-profit university―DeVry University, previously heavily-fined by the federal government for fraudulent operations―to police fraud in higher education. Surely America can do a better job of providing educational opportunity for its people” (Today’s College Students Are Paying More for Less by Lawrence Wittner).

David Koch and Brett Kavanaugh’s nomination to the U.S. Supreme Court

Billionaire David Koch had promised to donate millions of dollars in support of Scotus nominee Kavanaugh through Americans for Prosperity, a group tied to the Koch Brothers' network. Why should we be concerned? The Libertarian Party platform of David and Charles Koch: 

 

·                     “We urge the repeal of federal campaign finance laws, and the immediate abolition of the despotic Federal Election Commission.’

·                     ‘We favor the abolition of Medicare and Medicaid programs.’

·                     ‘We oppose any compulsory insurance or tax-supported plan to provide health services, including those which finance abortion services.’

·                     ‘We also favor the deregulation of the medical insurance industry.’

·                     ‘We favor the repeal of the fraudulent, virtually bankrupt, and increasingly oppressive Social Security system. Pending that repeal, participation in Social Security should be made voluntary.’

·                     ‘We propose the abolition of the governmental Postal Service. The present system, in addition to being inefficient, encourages governmental surveillance of private correspondence. Pending abolition, we call for an end to the monopoly system and for allowing free competition in all aspects of postal service.’

·                     ‘We oppose all personal and corporate income taxation, including capital gains taxes.’

·                     ‘We support the eventual repeal of all taxation.’

·                      “As an interim measure, all criminal and civil sanctions against tax evasion should be terminated immediately.’ 

·                     ‘We support repeal of all law which impede the ability of any person to find employment, such as minimum wage laws.’

·                     ‘We advocate the complete separation of education and State. Government schools lead to the indoctrination of children and interfere with the free choice of individuals. Government ownership, operation, regulation, and subsidy of schools and colleges should be ended.’

·                     ‘We condemn compulsory education laws … and we call for the immediate repeal of such laws.’

·                     ‘We support the repeal of all taxes on the income or property of private schools, whether profit or non-profit.’

·                     ‘We support the abolition of the Environmental Protection Agency.’

·                     ‘We support abolition of the Department of Energy.’

·                     ‘We call for the dissolution of all government agencies concerned with transportation, including the Department of Transportation.’

·                     ‘We demand the return of America's railroad system to private ownership. We call for the privatization of the public roads and national highway system.’

·                     ‘We specifically oppose laws requiring an individual to buy or use so-called self-protection equipment such as safety belts, air bags, or crash helmets.’

·                     ‘We advocate the abolition of the Federal Aviation Administration.’

·                     ‘We advocate the abolition of the Food and Drug Administration.’

·                     ‘We support an end to all subsidies for child-bearing built into our present laws, including all welfare plans and the provision of tax-supported services for children.’

·                     ‘We oppose all government welfare, relief projects, and ‘aid to the poor’ programs. All these government programs are privacy-invading, paternalistic, demeaning, and inefficient. The proper source of help for such persons is the voluntary efforts of private groups and individuals.’

·                     ‘We call for the privatization of the inland waterways, and of the distribution system that brings water to industry, agriculture and households.’

·                     ‘We call for the repeal of the Occupational Safety and Health Act.’

·                     ‘We call for the abolition of the Consumer Product Safety Commission.’

·                     ‘We support the repeal of all state usury laws.’

“...The agenda of the Koch brothers is to repeal every major piece of legislation that has been signed into law over the past 80 years that has protected the middle class, the elderly, the children, the sick, and the most vulnerable in this country.

“It is clear that the Koch brothers and other right wing billionaires are calling the shots and are pulling the strings of the Republican Party. And because of the disastrous Citizens United Supreme Court decision, they now have the power to spend an unlimited amount of money to buy the House of Representatives, the Senate, and the next President of the United States...

“Our great nation can no longer be hijacked by right-wing billionaires like the Koch brothers. For the sake of our children and our grandchildren, for the sake of our economy, we have got to let democracy prevail” (What Do the Koch Brothers Really Want? by Bernie Sanders).

Commentary:

We already have witnessed a takeover of the Republican Party, the weakening of our labor unions, right-to-work laws to keep workers powerless, the shutting down of the federal government, the denial of climate change from the executive and legislative branches of government, ALEC-backed legislators who created bills to restrict minority voting, the scapegoating of teachers, the attacks on retirees’ and public employees’ pensions, the deprivation of university and college adjunct faculty, the systematic dismantling of public ownership and services, the privatized exorbitantly priced healthcare system, the rewriting of the tax code to benefit the wealthiest Americans, the victimization of immigrant children and their parents, and other forms of oligarchic oppression. 

Are we also going to allow the continuing deregulation of our environmental protections; the continuing privatization of our public schools; the eradication of Social Security, Medicare and Medicaid; the transformation of the U.S. courts and the privatization of the justice system, and for a radical right-wing U.S. Supreme Court’s reinterpretation of the U.S. Constitution to successfully oppress the majority of Americans?

–Glen Brown

Eighty-Seven Elephant Carcasses Were Found in Botswana, Months after It Disarmed Its Anti-Poaching Unit

“The carcasses of 87 elephants have been discovered near a Botswana protected sanctuary, killed and stripped for their tusks.

“The elephants were discovered by Elephants Without Borders, a conservation nonprofit. The organization said they ‘discovered the alarming rate while flying the Botswana government aerial [elephant] census.’

“‘I'm shocked, I'm completely astounded,’ Mike Chase of Elephants Without Borders told the BBC. ‘The scale of elephant poaching is by far the largest I've seen or read about anywhere in Africa to date.’

“Many of the elephants were killed within the last few weeks and three white rhinos in the same area were poached and killed within the last three months, according to an Elephant Poaching Incident Report Reference written by Chase and obtained by NPR.

“‘All carcasses [were] presumed to be poached, because all of them had their skulls chopped to remove their tusks,’ writes Chase. ‘Poachers tried to hide their crimes by concealing the mounds of rotting flesh with drying bushes.’

“‘The varying classification and age of carcasses is indicative of a poaching frenzy which has been ongoing in the same area for a long time,’ the report says.

“Botswana is home to the largest elephant population in the world, according to the Great Elephant Census, a report conducted by Elephants Without Borders and the Paul G. Allen Family Foundation. The country holds 37 percent of its continent's endangered elephant population. Elephant populations in Africa declined by 30 percent — around 144,000 elephants — from 2007 to 2014.

“The same report says 84 percent of all elephants in the continent were sighted in legally protected areas, like the ones the 87 elephants were poached in. The carcasses were found near the Okavango Delta wildlife sanctuary, a biodiverse international tourist destination of over 22,000 square kilometers.

“Botswana disarmed its anti-poaching unit in May, one month after President Mokgweetsi Masisi took office. The country previously had a shoot-to-kill policy against poachers. The BBC reports a ‘senior official in the president's office, Carter Morupisi, told journalists in Botswana at the time that the 'government has decided to withdraw military weapons and equipment from the Department of Wildlife and National Parks', but he did not explain why.’

“Large-scale poaching was rare before the policy was rescinded, reports the BBC. ‘The poachers are now turning their guns to Botswana. We have the world's largest elephant population, and it is open season for poachers,’ Chase told the BBC” (National Public Radio, September 3, 2018). 

Labor Day

Obama's Allusions to Trump in His Eulogy for McCain

"...John believed in honest argument and hearing our views. He understood that if we get in the habit of bending the truth to suit political expediency or party orthodoxy, our democracy will not work. That's why he was willing to buck his own party at times, occasionally working across the aisle on campaign finance reform and immigration reform. That's why he championed a free and independent press as vital to our democratic debate. And the fact it earned him good coverage didn't hurt either.

"John understood as JFK understood, as Ronald Reagan understood that part of what makes our country great is that our membership is based not on our blood line, not on what we look like, what our last names are, not based on where our parents or grandparents came from or how recently they arrived, but on adherence to a common creed that all of us are created equal. Endowed by our creator with certain inalienable rights...

"So much of our politics, our public life, and our public discourse can seem small and mean and petty. Trafficking in bombastic manufactured outrage, its politics that pretends to be brave and tough, but in fact is born of fear. John called on us to be bigger than that. He called on us to be better than that...

"Today is only one day in all the days that will ever be, but what will happen in all the other days that will ever come can depend on what you do today. What better way to honor John McCain's life of service than as best we can follow his example to prove that the willingness to get in the arena and fight for this country is not reserved for the few, it is open to all of us, and in fact it is demanded of all of us as citizens of this great republic. That's perhaps how we honor him best, by recognizing that there are some things bigger than party or ambition or money or fame or power, that the things that are worth risking everything for, principles that are eternal, truths that are abiding. At his best, John showed us what that means. For that, we are all deeply in his debt..." (CBS News).