Stable Value Investment Association

Bolstering Retirement Security

Thank you. The topic of my talk this morning is how we can encourage increased retirement saving on top of Social Security. I'd also be happy to answer questions about how we can shore up Social Security's own long-term finances, which was the focus of a recent book I co-authored with Professor Peter Diamond of MIT.

The bottom line is that too many Americans have little if any additional financial assets on top of Social Security:

· For example, half of households nearing retirement age have $10,000 or less in a 401(k) or IRA.· Roughly a quarter of those offered the opportunity to participate in a 401(k) do not do so, and only about 5 percent of participants contribute the maximum allowable amount.· Furthermore, workers often do not adequately diversify their investments.

· And when they change jobs, many cash out their retirement savings rather than transfer them to their new employer's plan or to an IRA.