Democratic Congressman Lynch has introduced a bill called the Retirement Security Education Act of 2005.
The purpose of the bill is to establish a grant program to enhance the financial and retirement literacy of mid-life and older Americans and to reduce financial abuse and fraud among such Americans, and for other purposes.
This sounds like an excellent way to help educate middle age Americans and help them become and stay financially sound as they grow older. It would be education that promotes an understanding of consumer, economic, and personal finance concepts, including saving for retirement, long-term care, and estate planning and education on predatory lending, identity theft, and financial abuse schemes.
Lots of people do not need this education. But many Americans do. As Social Security is being threatened, I am hoping that not only can save this important safety net but also provide people with additional help for their retirement.
Here are reasons listed from the bill with reagrd to the need for this legislation.
(1) Improving financial literacy is a critical and complex task for Americans of all ages.
(2) Low levels of savings and high levels of personal and real estate debt are serious problems for many households nearing retirement. Personal savings rates have fallen to a dangerously low 2 percent.
(3) Approximately half of working Americans have any form of pension coverage. Today, just 21 percent of workers have defined benefit coverage and just 27 percent of workers are enrolled in 401(k)s.
(4) Because women have longer life expectancies, the number of poor older women is more than twice the number of poor older men. Studies have also found that there is a substantial gender gap in all sources of retirement income including Social Security, pensions, savings and earnings from post-retirement employment.
(5) The more limited timeframe that mid-life and older individuals and families have to assess the realities of their individual circumstances, to recover from counter-productive choices and decision-making processes, and to benefit from more informed financial practices, has immediate impact and near term consequences for Americans nearing or of retirement age.
(6) Research indicates that there are now 4 basic sources of retirement income security. Those sources are social security benefits, pensions and savings, healthcare insurance coverage, and, for an increasing number of older individuals, necessary earnings from working during `retirement' years.
(7) The Congressional Budget Office has found that about a quarter of baby-boomer households have so far failed to accumulate significant savings and that they appear likely to depend entirely on government benefits in retirement.
(8) Over the next 30 years, the number of older individuals in the United States is expected to double, from 35,000,000 to nearly 75,000,000, and long-term care costs are expected to skyrocket.
(9) Over the next 25 years, the number of individuals over 65 years of age requiring long term care services is expected to double to approximately 12 million.
(10) Fraud against older individuals, including telemarketing schemes, predatory lending, identity theft and Internet fraud has risen dramatically.
Saving Social Security is not enough. We can do more.