While these priorities remain, much has changed, particularly in recent years. No doubt you have taken a look at your 401(k) statement or health care bills recently and can see some of the changes for yourself. Over 30 percent of Americans who are on the verge of retirement and have been socking away savings for 20 years or more have not seen their 401(k)s recover fully from the economic downturn.
This at a time when more and more people are relying on 401(k) accounts as a primary retirement savings vehicle. In contrast to the defined benefit pensions many Americans used to receive, our current retirement system has transferred the responsibility for retirement savings and risk from employer to employee. This means that individuals must make several proactive decisions, including the decision to save, how much to save, how to invest and how to make their savings last through retirement.
But even those lucky enough to have earned a pension are vulnerable. In Wisconsin, I have seen the devastation of plants closing and pension plans crumbling. Now more than ever, it is vital that we shore up the nation's system of individual retirement savings. Last year, the Senate Special Committee on Aging ensured that 401(k) account fees be clearly disclosed to consumers on quarterly statements. Before that, investment firms were not required to disclose the fees workers were paying. Here's the impact: An additional 1 percent fee can reduce a worker's 401(k) balance by as much as 20 percent over a two-decade period, according to Government Accountability Office calculations.