America’s Debt Adds to Retirement Woes

Combine the burgeoning U.S. national debt with low retirement savings rates and you have a crisis in the making.

That was the word from Tom Crawford, senior managing director with FTI Consulting, who gave an overview of the political scene at today's Retirement Industry Conference.

The debt issue is a ticking time bomb, Crawford said, and dealing with that debt means that policymakers aren't doing anything to prioritize retirement savings.

In addition, continued stock market volatility and the threat of currency devaluation contribute to the retirement crisis, he said.

"A whole bunch of people will be out on their own because the government won't be able to help them," he said. "And while they're on their own, they will be exposed to volatility."

The only real solution to the debt issue, Crawford said, is continued economic growth - or what he described as 2.2 percent annual growth for the next 40 years. But it's not realistic to expect continued growth of this size given the current political climate.

Although policymakers recognize how few Americans are saving for retirement, they are not enacting laws to encourage people to do so, Crawford said. If anything, government either wants to penalize those who save or compete with private industry by creating its own type of savings plans.

"The government sees this as an opportunity to collect people's money and then control it," he said.

The financial services industry needs to do a better job of telling its story to Washington and to the public, Crawford said.

"We must do better at telling the public how they can empower themselves," he said. "We need to convince Washington to prioritize long-term savings in policy-making."

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

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