Tags: retirement | 401k | CPS | income

SSA Experts: Don't Believe Negative Hype About Americans' Retirement Finances

By    |   Saturday, 25 January 2014 01:52 PM

Conventional wisdom has it that most Americans are financially ill-prepared for retirement.

But that's not true, say Sylvester Schieber, former chairman of the Social Security Advisory Board, and Andrew Biggs, former principal deputy commissioner of the Social Security Administration.

"The story pushed by pundits and policymakers is that the shift over the past 30 years from defined-benefit pensions to defined-contribution savings plans such as 401(k)s has dramatically reduced retirement income to supplement the benefits provided by Social Security," they write in The Wall Street Journal.

Editor’s Note:
38 Trades That Could Turn $1,000 Into $49,000

But that story largely stems from the Census Bureau's Current Population Survey (CPS), the duo explains. And the CPS doesn't include most of the income Americans receive from 401(k) and IRA plans, they say.

The CPS tallies income received by Americans from their retirement plans.

"The Census Bureau's definition of income, however, includes only payments made on a regular, periodic basis," Schieber and Biggs write.

"So monthly benefits paid from a defined benefit pension or an annuity are counted as income, while as-needed withdrawals from 401(k)s or IRAs are not."

That means retiree resources are understated, the pair argues.

"Without doubt, we need pension reform, but we need to have a full, accurate and honest understanding about how all the elements of the current retirement income security system are working if we hope to have any chance of making the right adjustments to current policies."

To be sure, when it comes to the self-employed, while their number is growing, they apparently aren't doing so well in setting up their retirement finances.

A total of 40 percent of self-employed people aren't saving regularly for retirement, and 28 percent aren't saving at all, according to a recent survey from TD Ameritrade, CNBC reports.

That compares with 12 percent and10 percent, respectively, for those who are employed by others.

Editor’s Note: 38 Trades That Could Turn $1,000 Into $49,000

Related Stories:

© 2018 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Personal-Finance
Conventional wisdom has it that most Americans are financially ill-prepared for retirement. But that's not true, say Sylvester Schieber, former chairman of the Social Security Advisory Board, and Andrew Biggs, former principal deputy commissioner of the Social Security Administration.
retirement,401k,CPS,income
338
2014-52-25
Saturday, 25 January 2014 01:52 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved