Actor, Writer Ben Stein Gives Oregonians Retirement Advice (AUDIO)

Oregon Senator Gordon Smith chaired a hearing on securing better retirement for older Americans.

Ben Stein Photo Courtesy: Kent State University

(WASHINGTON, D.C.) - During a hearing of the Special Committee on Aging hearing, Chairman Gordon Smith, R-OR, questioned actor and writer Ben Stein as to how people can set a retirement savings goals. Smith also pointed to the dramatically declining U.S. savings rate as a reason why Congress should implement reforms to help American`s better save for retirement.

"Tomorrow's retirees will need to stretch retirement dollars over a longer period of time," said Smith. "We need to find better ways for people to manage their assets and preserve their savings throughout retirement. With a huge wave of baby boomers about to enter retirement, it is more important than ever that we educate Americans about the financial risks in retirement."

Senator Smith questioned Stein on how to determine a retirement savings goals. Stein suggested subtracting the amount of money you expect to save your last year working from your estimated last year`s salary and multiplying the total by fifteen. The result is the minimum amount of money an individual should save for retirement. Stein noted it is `you need a heck of a lot, is the short answer."

To help Oregonians better save for their retirement, Senator Smith has introduced the Retirement Savings and Security Act. The Smith bill includes several provisions, such as:

Promotion of `automatic enrollment" of workers into company-sponsored 401(k) plan

Expansion of the Saver`s Credit, a tax credit for low and moderate-income individuals who contribute to workplace retirement plans and Individual Retirement Accounts (IRA)

Allow transfers from Flexible Spending Accounts (FSA). This provision would allow workers who set aside salary in FSAs for qualified benefits, such as health care costs, to transfer up to $500-a-year in unused health FSA amounts to a defined contribution plan or IRA.

Encourage retirees to invest in life annuities by making a portion of certain annuity payments free from taxation. Annuities allow retired workers to manage their savings over their lifetime, providing a steady income through retirement.

Smith warned that retirees should be concerned about inflation, the risk of investment income yielding smaller than expected returns and higher then expected health care or long-term care costs. Smith is currently developing legislation with Senators Conrad and Kerry that addresses these issues. While helping all Americans, the bill will particularly focus on women as they tend to live longer and women receive significantly less income during retirement than men.