WASHINGTON – If you believe United States will still be here when you retire,then Social Security will still be here when you retire,Sen. Tom Harkin,D-Iowa,said.
But,Harkin said,the current retirement system is a wobbly stool.
Harkin and Sen. Bernard Sanders,I-Vt.,met with witnesses Thursday to discuss ways to strengthen the retirement system. The senators said the current system doesn’t do enough for the middle class.
Phyllis Borzi,assistant secretary of labor for the Employee Benefits Security Administration,said Americans are worried they haven’t saved enough for retirement.
Sanders said the middle class is collapsing. Decreased income has made it difficult to save,and recent hardships have led people to take loans out of their 401(k) retirement plans,leaving no additional savings to supplement Social Security income.
“We are facing a future where no one other than the rich will have an opportunity for a safe and secure retirement,” Harkin said. “People that work hard for their entire lives will find themselves teetering on the brink of poverty,unable to pay the basic costs of living.”
But he also said the Social Security system is backed by the government,which would never stop paying benefits to retirees.
Sanders said he’s tired of hearing people say Social Security benefits should be cut and the retirement age should be raised to 70.
For years,workers could begin receiving full Social Security benefits at age 65. But beginning with people born after 1938,that age is rising to 67.
Sanders asked multiple witnesses about the effects of increasing the retirement age to 70. The witnesses agreed it would reduce retirees’ incomes because so many people retire early,usually for health reasons,and take a lower Social Security benefit.
Ross Eisenbrey,vice president of the Economic Policy Institute,suggested raising the tax cap for workers and removing the cap for employers,increasing what workers and companies pay for Social Security and rapidly pumping more money into the system.
Employees and employers pay into Social Security for the first $106,800 a worker makes.
Some lawmakers have different proposals,which do not include raising taxes,for how Social Security should be reformed. None of them were at the hearing.
Rep. Paul Ryan,R-Wis.,has proposed a bill he says would make Social Security solvent permanently. Workers under age 55 would could choose to invest more than one-third of their Social Security taxes in personal retirement accounts. These accounts would be similar to Thrift Savings Plans available to Federal employees that allow workers to leave the money to heirs and guarantees workers against loss,unlike other retirement accounts based on the stock market.
Provisions such as these are important to people such as Shareen Miller,48,a personal care assistant from Falls Church,Va.,who testified at the hearing. Miller is concerned about what will happen to her if she is unable to work to full retirement age,and how she will supplement Social Security income.
Miller said she makes about $35,000 a year,just enough to cover expenses such as groceries,utilities and her mortgage. She has about $28,000 left in a 401(k) from a job as a bookkeeper that she lost when the recession hit.
If Miller can work to full retirement age,she will qualify for $17,000 a year in Social Security benefits. Miller said she is worried not only about staying healthy enough to work until full retirement but also how she will make up the difference in income when she does retire.
Miller said lawmakers need to “commit to finding solutions that allow Americans who spend a lifetime of hard work,driving their bodies to the limit, to retire with dignity.”
Harkin said this hearing is the first of a series the Senate Health,Education,Labor and Pensions Committee will hold to examine problems and solutions to the U.S. retirement system.