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The IRS recently released a first-time, and alarming, report on participation in retirement savings accounts, showing that the fewer and fewer workers are saving for retirement out of their paychecks, and the amount they are saving is shrinking too, down 6 percent in real dollars from 2008 to 2010. David Cay Johnston, investigative journalist and author, and specialist in economics and tax issues, was one of very few in the traditional media to register the appearance of this report, and it's got him worried.
[T]he number of Americans deferring part of their wages into 401(k)-type plans fell in 2009 and again in 2010.
Two-thirds of taxpayers with jobs saved nothing in retirement plans.

Among twenty-somethings, only 1 in 8 or so saved. [...]

Overall, the IRS report and other official data show how government policy that favors individual savings in 401(k), IRA and similar plans simply are not meeting the needs of workers, or of American society.

Tens of millions of Americans will reach old age without adequate financial resources if we continue with our three-decade-old experiment with defined contribution plans that shift all risks onto the workers. If we continue down this path, we will in time face a stark choice – greater burdens for taxpayers, a boon for the makers of cat food, or unconscionable deaths by starvation.

Johnston argues, as many of us have, that the government should be working on making sure that private and public pension systems are sound and adequate to stave off the otherwise inevitable retirement crisis. Until employment increases, wages increase, student loan debt shrinks, and health care costs are reduced, working people are just going to be too stretched to be able to save adequately. That's particularly true when you're talking about plans that are invested in a volatile and unpredictable stock market. Tackling all of that is a massive, daunting proposition, but one that has to be faced and soon. A really good place to start would be strengthening Social Security, and increasing its benefits.

Join Daily Kos and CREDO in telling the Senate to support the Harkin and Begich plans to strengthen Social Security.

Originally posted to Joan McCarter on Fri Sep 06, 2013 at 01:53 PM PDT.

Also republished by Daily Kos.

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