Retirement on Hold: American Workers $6 Trillion Short

9/18/2010

The study, conducted by Boston College's Center for Retirement Research, says savings have been squeezed by declines in stock and housing values. The $6.6 trillion figure is based on projections of retirement and income for American workers ages 32-64. The study's authors say they arrived at the amount using conservative assumptions, including a 3 percent rate of return on assets and no further cuts in pension coverage or increases in the Social Security retirement age.

Health insurers are asking for immediate rate hikes of more than 20 percent in Connecticut for some plans, citing rising medical costs and federal health reform laws as reasons. Both issues — the new federal health care reform and rising medical costs — are significant drivers of the increases, according to filings by insurers with state regulators that were reviewed by The Courant. It remains to be seen how much of the requests will be approved.

Wild gyrations on Wall Street have made U.S investors leery of buying individual stocks and skeptical that the market is a fair place to park their money. The survey confirms that average investors have been growing more concerned about the stock market as a safe place to invest for retirement. And news about the market has been unsettling for ordinary investors of late: More than 60 percent of those surveyed said they had paid attention to news reports about swings in the stock market.

The former head of the Federal Reserve said fiscal stimulus efforts have fallen far short of expectations, and the government now needs to get out of the way and allow businesses and markets to power the recovery. At this point, “we’d probably be better off doing less than more” because “you’d be far better off to allow the normal market forces to operate here,” Greenspan said. That’s largely because stimulus spending is not proving as effective as many had hoped. “To the extent the evidence suggests very large deficits concurrently crowd out capital investment, there is a debit to the stimulus program that is somewhere between a third and a half of what the gross stimulus is,” he said.

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