By 1995 there were more 401(k)-type plans than traditional defined-benefit plans. Now there are about twice as many. And as Robert Hiltonsmith, a policy analyst at the think tank Demos, documents in a new report, they’re not working out that well.
Retirement experts say average workers approaching retirement need about $250,000 in their 401(k)s to maintain their standard of living. They don’t have it. The number is closer to $98,000—not much more than a third of the recommended amount.
Let’s talk about deficits for a moment. Not that $1.3 trillion federal shortfall that’s in the news these days (A CBS News poll shows that only a handful of Americans think that’s an urgent problem.) No, I’m talking about the gap between how much money people have presently put away for retirement and how much they would need to save to maintain their standard of living when they finally stop working. That deficit comes to a whopping $6.6 trillion, according to a new report by Demos, a New York think-thank.
According to Javier Silva, a senior research and policy associate with Demos, a New York think tank and public policy organization, homeowners' equity fell from an average of 68.3 percent to 55 percent between 1973 and 2004. Americans now own a smaller stake in their homes than they used to. In the 1950s, they owned nearly 80 percent.
If real estate appreciation slows or declines, homeowners without equity that is firmly established may find themselves owing more than their houses are worth.
That all portends "payment shock" for those with adjustable-rate mortgages whose loans are due soon to adjust, said Javier Silva, senior research and policy associate with the public policy research group Demos in New York City. "Lots of ARM customers are experiencing payment shock already, and we're only see the first wave of adjustments upward," Silva said. "People didn't understand how much their interest rate could rise, or were unprepared for it. I'm not surprised that we're seeing rising foreclosures.
A Retirement Funding Boost. Let’s overhaul the fabled 401(k), the retirement plan that was never meant to be a mainstay of long-term savings. Some 40% of Americans don’t even have access to them at work, with minorities, young people and low-income workers showing the lowest participation rates, according to Demos, a New York-based policy center. Why not make a tax-free contribution to all Americans in a no-fee, universal savings account?
"401(k)s fail millions of retirees," decries a new report from Demos.org. Its argument: America's retirement plans don't provide security because of their high fees. Not to mention that their "benefits vary with the size of employer and employee contributions and the volatile swings of the stock market," according to a press release from the organization.
Among full-time workers, just 38% of Latinos, 54% of workers aged 25 to 43 and 38% of those in the lowest income bracket have access to a workplace savings plan, according to a report titled “The Failure of the 401(k),” published Wednesday by Demos, a nonpartisan public-policy and research organization that focuses on lower-income Americans.
Demos, a non-partisan election reform group, said higher voter turnout, especially among youth, reversed a decades-old trend of low electoral participation. The group said about 120 million voted in the Nov. 2 election, an increase of 15 million voters from 2000.
Election Day registration, or EDR, makes it possible for new voters, the recently relocated and those whose registrations were incomplete or lost, to participate without unnecessary hurdles, the group said.
A major survey released by the think tank Demos provides some important new insights on how average American families are using credit cards.
The implication is hard to escape: many middle- and low-income American families are using consumer credit as a way to weather fluctuations in their finances.
Americans owe $800 billion in credit card debt, more than triple the amount from 1989, and a 31 percent increase from five years ago, according to a recent report, "The Plastic Safety Net," by the Center for Responsible Lending, and Demos, a research group based in New York.
The study found that a third of low- and middle-income American households used credit cards for basic expenses - rent, groceries and utilities - in any 4 of the last 12 months.
Those with the worst credit card debt were people ages 50 to 64, who owed $9,124
A fraudulent appraisal "can lead homeowners to borrow more money than their homes are worth, putting themselves at risk of being 'upside down' in a home -- e.g. not being able to sell for a high enough price to pay off their mortgage," according to a briefing paper on appraisal fraud put out by Demos, a New York-based think tank.
According to the advocacy group Demos, the average balance among lower- and middle-income households is $8,650.
"World News Tonight's" special series "Credit Crunch" aims to help you get on the road to becoming debt free.
Draut argues that "with the possible exception of having a larger array of entertainment and other goods to purchase, members of Generation X appear to be worse off by every measure" than prior generations.
Robert Frank, an economist at Cornell University, for instance, found that in counties with the widest income gaps, rates of personal bankruptcy and divorce rates were higher than average.
It’s broad allegations of voter fraud like these that are “going to have an impact on voters’ experience at the polls,” said Tova Wang, elections reform expert and Senior Democracy Fellow at Demos, a liberal public policy research and advocacy organization. “We’ve already seen a lot of incidents where allegations are getting tossed about and voter fraud is called an epidemic.
New York Times columnist Bob Herbert has earned the Levees.org 'Seal of Approval' for his portrayal of the flooding of New Orleans in a recent column about crumbling American infrastructure.
New York Times columnist Bob Herbert has earned the Levees.org 'Seal of Approval' for his portrayal of the flooding of New Orleans in a recent column about crumbling American infrastructure.
Then came Florida, where thousands of voters confused by Palm Beach County's ballot design in the 2000 elections voted for the wrong presidential candidate, or for two candidates by mistake. The most common error: voters casting ballots for both Democrat Al Gore and Reform Party candidate Pat Buchanan, indicating that they made a mistake the first time. Republican George W. Bush ultimately won the state by 537 votes.
Amidst the fears, voting experts say they want to make sure that those who become poll watchers know the rules of the polling place so legitimate voters are not unfairly challenged.
"We just want to make sure that everyone is clear on the rules -- that voters know their rights, that these groups know what they are and aren't allowed to do," said Tova Wang, Senior Democracy Fellow at Demos.
Eliminating the deadline and allowing same-day registration would boost voter turnout among underrepresented groups and increase overall voting rates, according to Demos, a nonpartisan think tank. Its researchers found that voter turnouts would have increased by 12.3 percent for 18- to 25-year-olds, 11 percent for Latinos, 8.7 percent for African-Americans and 6.8 percent overall if New York State had same-day registration during the 2000 election.
“A lot of their procedures seem to be deficient on their face,” said Scott Novakowski, one of the report’s authors and a fellow with Demos, a New York City-based public policy research group. “Very rarely do we see declines of that size in a state that has been in compliance.”