Seniors' Personal Savings on the Decline

WASHINGTON, D.C. – In an effort to combat the declining personal savings rate in the United States, Sens. Gordon H. Smith (R-OR) and Maria Cantwell (D-WA) joined today in introducing legislation to help older Americans better prepare for and manage their assets in retirement. The legislation, S.3053, will provide grants to Area Agencies on Aging to provide financial literacy services for older individuals.
"We are experiencing a national personal savings crisis," said Senator Smith. "Not enough Americans, including seniors, have the basic financial literacy skills needed to properly prepare for retirement and asset management. A simple investment by the federal government in financial literacy programs can help ensure a safe and secure retirement for many of our seniors."
"Our nation's seniors often don't have access to the information or tools they need to remain financially independent or manage their assets," said Cantwell. "This legislation will help seniors navigate the complex issues surrounding retirement, which can be a daunting task for any American, and will help them make sound financial decisions."
"We congratulate Senators Smith and Cantwell on their commitment to financial literacy programs and to helping older women avoid living in poverty," said Cindy Hounsell, President of the Women's Institute for a Secure Retirement. "This legislative initiative is based on sound research and the demonstrated value of financial educational programs and services. It is time that Congress move forward to help communities make it easier for older women and men to help themselves, avoid poverty, and reduce dependence on federal programs."
In a 2008 Retirement Confidence Survey by EBRI/Matthew Greenwald&Associates, 40 percent of retirees surveyed reported that they are not knowledgeable about investments and investment strategies. In addition, a 2003 national survey by AARP of consumers aged 45 and older found that they often lacked knowledge of basic financial and investment terms. For example, only about half of respondents reported knowing that diversification of investments reduces risk.
The Smith-Cantwell bill will improve older Americans' financial literacy and help them better prepare for and manage their assets in retirement. Under the bill, grants will be provided to Area Agencies on Aging to enable these organizations to provide services to improve financial literacy among older individuals, especially older women. These services include education, training and other assistance.