U.S.

Retiree
What is Retirement USA?

Retirement USA is a national initiative working for a new retirement

system that, along with Social Security, will provide universal, secure,
and adequate income for future retirees.

Retirement USA is convened by five organizations the AFL-CIO, the

Economic Policy Institute, the National Committee to Preserve Social
Security and Medicare, the Pension Rights Center, and the Service
Employees International Union that recognize that retirement income
security is a major issue of concern for current and future retirees.

Need of Retirement USA

Our retirement system is failing too many Americans. While Social

Security continues to do its part, our private pension system is not delivering
what most retirees need to provide for their basic needs.

Even before the recent economic downturn, retirement security had

become a major national concern, as companies increasingly shifted from
traditional pensions to do-it-yourself savings plans.

The faltering stock market and dwindling 401(k) accounts have turned a
major concern into a crisis, highlighting the weaknesses in our nations
patchwork retirement system.

What is Retirement USA doing?

Retirement USA has developed 12 Principles for a New Retirement

System, which provide a framework for a system in which employers, workers,
and the government would share the responsibility for the retirement security for
all American workers.

Retirement USA has issued a call for the submission of visionary

proposals for a future private retirement income program. Selected
proposals were presented at a Re-Envisioning Retirement Security conference
in Washington, D.C. on October 21, 2009.

Principles for a New Retirement System in the US

Universal Coverage. Every worker should be covered by a retirement

plan. A new retirement system that supplements Social Security should
include all workers unless they are in plans that provide equally secure
and adequate benefits.

Secure Retirement. Retirement shouldn't be a gamble. Workers should

be able to count on a steady lifetime stream of retirement income to
supplement Social Security.

Adequate Income. Everyone should be able to have an

adequate retirement income after a lifetime of work.The average worker
should have sufficient income, together with Social Security, to maintain a
reasonable standard of living in retirement.

Shared Responsibility. Retirement should be the shared responsibility of

employers, employees and the government.

Required Contributions. Employers and employees should be required

to contribute a specified percentage of pay, and the government should
subsidize the contributions of lower-income workers.

Pooled Assets. Contributions to the system should be pooled and

professionally managed to minimize costs and financial risks.

Payouts Only at Retirement. No withdrawals or loans should be

permitted before retirement, except for permanent disability.

Lifetime Payouts. Benefits should be paid out over the lifetime of retirees
and any surviving spouses, domestic partners, and former spouses.

Portable Benefits. Benefits should be portable when workers change

jobs.

Voluntary Savings. Additional voluntary contributions should

permitted, with reasonable limits for tax-favored contributions.

Efficient and Transparent Administration. The system should be

administered by a governmental agency or by private, non-profit
institutions that are efficient, transparent, and governed by boards of
trustees that include employer, employee, and retiree representatives.

be

Effective Oversight. Oversight of the new system should be by a single

government regulator dedicated solely to promoting retirement security.

The Retirement Income Deficit

The deficit figure covers households in their peak earning and saving years
those in the 32-64 age rangeexcluding younger workers who are just beginning
to save for retirement as well as most retirees. It takes into account all major
sources of retirement income and assets: Social Security, traditional pension
plans, 401(k)-style plans, and other forms of saving, and housing.
The measure assumes people will continue to work, save, and accumulate
additional pension and Social Security benefits until they retire at age 65, later
than most people currently retire. It also assumes that retirees will spend down
all their wealth in retirement, including home equity. The deficit is thus in many
respects a conservative number.

The Center calculated the Retirement Income Deficit for Retirement USA in
a three-step process.
Step 1: The Center first calculated a replacement rate projected retirement
income as a percent of pre-retirement income for each household in a
representative sample.
Step 2: Next, it compared that projected replacement rate with a target rate that
would allow the household to maintain its standard of living in retirement.
Step 3: Finally, if the projected replacement rate was less than the target rate, it
estimated how much additional savings each household would need today to
close the retirement income gap, and then summed these amounts across
households.

Story

Jeanne Majors
Brooklyn, NY
On May 4th of this year I was able to leave the NYC Shelter system for a room at
the YWCA in downtown Brooklyn. How did this occur? Well, I started collecting
early Social Security retirement benefits in March of this year and I was able to
move in. Prior to this, I was in the shelter system from August 2010 because my
retirement income wasn't enough to get affordable housing in NYC without a job
(full time or part time). My savings were exhausted due to bills, transportation
and helping a disabled younger sister (who is 45) with some incidentals.
If the Republicans look to take monies from Social Security to offset the deficit,
then I can no longer afford to live at the YWCA and would have to go back to
depending upon tax-supported dollars for shelter living. At 62, (single, and African
American) this would be detrimental to my health and everything that I worked
for. I retired with the thought that some employment for seniors would be
available until I could collect my Social Security retirement benefits. Then I would
be able to live somewhat comfortably.
I don't think our Congressional Representatives have any idea what it is to live on
a fixed income, let alone skip meals or do without medications. They should try it
sometime!!!!

Proposal
Retirement Security and Longevity Risk- Mark Shemtob, Abar
Pension Services Inc.
The Retirement Security and Longevity Risk proposal would provide near
universal longevity insurance protection in a cost efficient manner. The program
would be mandatory to all workers and would provide insurance to protect
against the risk individuals face in outliving their retirement savings by providing
lifetime benefits beginning at the extended longevity age. Employers,
employees and the government would share in funding the program which would
be administered privately with government oversight.