Biden Paints Bleak Picture on Retirement Income

by Ali Jepsen

Democratic presidential candidate, Joe Biden, went straight for the jugular a few weeks ago when proposing a plan for the current issue of retirement savings. The topic has been especially prevalent in this campaign since the current administration is now experiencing the first influx of retiring Baby Boomers, with millions to go in the next 20 years. The senator from Delaware cited dismal statistics about our current workforce and left much doubt as to whether the nation can handle such a huge amount of retirees. In hopes that these statistics were incorrect, this "fact check" looked into them further.

In an effort to alert the public to the severity of the problem, Biden claimed that, currently, only 20% of workers have pension plans. This contrasts with an earlier statement that over 80% of Americans in the workplace had these plans in the 1980s. While the source for the latter statistic is still unknown, an article in CNN Money (quoting the Bureau of Labor Statistics) does show that only 21% of workers are currently covered by defined-benefit plans. If you choose to forgive Biden the 1% difference, his claim istrue. With only 21% of workers covered, this does not account for the millions of Baby Boomers, let alone those in the workforce who will retire after them.

If these statistics aren’t disheartening enough, Biden went on to comment on retirement plans, or the lack thereof, in the U.S. According to Biden, half of the American workforce is without such a plan. This claim in supported by an article on the Retirement Security Project’s web site.

Finally, Biden explained that part of America’s problem with retirement savings is a result of a lack of savings in general. He claimed that the average savings rate in the United States is less than 1%. While this number seems shockingly low, the current data (provided by the Bureau of Economic Analysis) speak volumes about the short-term perspective of many U.S. consumers.

Lesson: Biden seems to be somewhat lost in the present muddle of the Democratic race, but his numbers on retirement security are on track. His policies and plans to reverse these depressing trends are what will define his success in the caucus.