BOSTON (TheStreet) -- The financial gap between what Americans need for retirement and what they have is $4.6 trillion as a national aggregate and an average $48,000 per person, according to congressional testimony by the Employee Benefit Research Institute.
Jack VanDerhei, EBRI's research director, was among those testifying at a hearing Thursday, The Wobbly Stool: Retirement (In)security in America, convened by the Senate Committee on Health, Education and Labor. Testimony and video of the hearing on U.S. retirement income adequacy is available online.
EBRI is a research institute based in Washington, D.C., that focuses on retirement and economic security issues. Its analysis estimates how much money will be needed for "basic" expenses (such as food and shelter) and uninsured health care costs in retirement, and what financial resources retirees are likely to have.
The deficit projection assumes no changes to the current Social Security benefit structure. If Social Security benefits were to be eliminated, the aggregate deficit would jump to $8.5 trillion and the average amount would increase to about $89,000.
Ross Eisenbrey, vice president of the Economic Policy Institute, a think tank that analyzes trends in employment and compensation, offered an even more pessimistic view by citing Boston College's Center for Retirement Research's estimate that American households ages 32 to 64 have a retirement income deficit of $6.6 trillion. "It is a figure that dwarfs the federal deficit and casts a pall over hopes of them retiring in any kind of comfort," he said.
A recurring theme of Eisenbrey's testimony was that, "Congress has made matters worse by focusing retirement policy on high-income households and neglecting low-income workers."
"While nothing to tout, the financial situation of seniors today might be as good as it will ever get for the typical American," he said. "Between declining pension coverage and Social Security cuts, it is possible that the next generation to retire will be the first to be worse off than its predecessor."
Eisenbrey blames, in large part, the shift away from traditional pension plans.