Middle Class Retirees Will Have to Cut Back Says
Study for Group Pushing Lifetime Annuities
Americans for Secure Retirement paid for study by
Ernst & Young to be released Monday
July
13, 2008 – Nearly three out of five “middle-class retirees” will
probably run out of money if they maintain their pre-retirement
lifestyles, says a report in the Washington Post today on a study from
Ernst & Young that is to be released tomorrow by the sponsoring
organization, Americans for Secure Retirement. The group promotes
lifetime annuities.
The Post and a few other media outlets appear to
have been provided advance copies by the industry-backed group.
A news release says the study’s author, Tom Neubig
of Ernst & Young, and Joe Reali, Chairman of Americans for Secure
Retirement, will present key findings of the study and answer questions
in a telephone press conference on Monday. The study is titled
Retirement.
The Post report by Nancy Trejos says the study
“finds that Americans will have to drastically reduce their standard of
living before retirement to live comfortably, or even avoid destitution,
later in life.
“Middle-income Americans entering retirement now
will have to reduce their standard of living by an average of 24 percent
to minimize their chances of outliving their financial assets, the study
found. Workers seven years from retirement will have to cut their
spending by even more -- 37 percent.
Neubig, national director of the Quantitative
Economics and Statistics practice at Ernst & Young told Trejos, "People
are going to have to adapt in a number of ways that they weren't
anticipating or hoping for. I think a lot of people are hoping to
maintain roughly the same standard of living after retirement. Our study
suggests they are going to have to make some changes."
Trejos writes, “The study warns of an impending
national crisis if workers, and lawmakers, do not react now to the
changing pension structures in corporate America.”
The news release promises a detail report tomorrow
that includes:
● National findings
● Findings for all 50 states and the District of
Columbia
● Reduction in standard of living retirees will
have to make to avoid outliving their financial assets
● Findings are categorized by income, gender, and
marital status
● A comparison between those entering retirement
now vs. those that are seven years away from retirement
● A comparison between those that have a
guaranteed source of income in retirement vs. those that are saving
entirely on their own
● What people can do to avoid outliving their
financial assets in retirement
Amercians for Secure Retirement Push Lifetime
Annuities
The Post reports the study was commissioned by
Americans for Secure Retirement, “a coalition of more than 50
organizations representing women's, small business, agricultural,
Hispanic and African American groups, among others.”
The Website SourceWatch.org, however, says
“Americans for Secure Retirement is an
Industry-funded organization promoting the "Retirement Security for
Life Act," which would provide tax breaks on annuity income for
retirees.
SourceWatch says the legislation backed by the
group was introduced in July 2004.
“The proponents of the legislation claim that under
the proposed act Americans would have more control over their
retirement, and empowering them with a steady income for life.
“In September 2004, O'Dwyer's PR reported that ASR
had retained Chlopak, Leonard, Schechter and Assocs to support its
lobbying efforts.
The organizations Website –
http://www.paycheckforlife.org/ – says, “Americans for Secure
Retirement is a broad-based coalition of groups committed to ensuring
retirement security. It includes a growing list of
diverse interests whose goal is to prevent the human consequences of
declining living standards, as well as the potential impact on local,
state and federal relief resources. It includes groups that represent
individuals most at risk of suffering reduced living standards,
including women, farmers, Hispanic-Americans, self-employed and other
middle-income workers with inadequate or no pension coverage.
The organization appears, from statements on the
Website, to be founded to promote annuities.
On the home page of the organization’s Website, it
says there are ways Congress can help Americans have a more secure
retirement.
How? The say, “Encouraging more savings is an
important first step, but it's not enough. Americans for Secure
Retirement supports legislation that would empower Americans to maintain
their standard of living through retirement. Specifically, that means
making it easier for them to secure a guaranteed paycheck for life, in
addition to Social Security, through products like lifetime annuities.”
July
13, 2008 – Nearly three out of five “middle-class retirees” will
probably run out of money if they maintain their pre-retirement
lifestyles, says a report in the Washington Post today on a study from
Ernst & Young that is to be released tomorrow by the sponsoring
organization, Americans for Secure Retirement. The group promotes
lifetime annuities.