Senators Collins, McCaskill Hold Aging Committee Hearing Titled, “Closing the Gap: Innovations to Promote Americans’ Financial Security”
Hearing examined innovative tools that may help improve retirement security
Click HERE for a copy of Senator Collins’ opening statement
Click HERE for a copy of Senator McCaskill’s opening statement
Washington, D.C.—U.S. Senators Susan Collins and Claire McCaskill, the Chairman and Ranking Member of the Senate Special Committee on Aging, held a hearing today titled, “Closing the Gap: Innovations to Promote Americans’ Financial Security.” The hearing was a continuation of the Committee’s focus on the retirement security crisis and identified new and innovative solutions that may improve the financial and retirement security of Americans.
According to the Center for Retirement Research at Boston College, the difference between what people have saved and what they need to save to live in retirement is about $7.7 trillion as of 2013. A myriad of factors affect the ability of individuals to save for retirement and ensure financial security as they age, including retirement plan accessibility and general financial literacy.
“In the course of our Committee’s focus on retirement security, we revealed that the gap between what Americans have saved for retirement and what they will actually need stands at an astonishing $7.7 trillion,” said Senator Collins. “The reasons for this disparity are manifold. Fortunately, our hearing revealed that there are a number of innovative products and services that hold promise for improving retirement savings.”
“The days when most workers had secure pensions from having spent decades at the same company are largely gone—and we’ve got to find safe and innovative ways to encourage younger workers to start saving for retirement,” Senator McCaskill said. “The financial and technology sectors have teamed up to present savers with new options, and we’ve got to take a look at them to ensure proper oversight and increase options for future generations.”
Many new apps and programs have the potential to leverage behavioral economics to steer people to desired savings outcomes and help to improve their financial literacy. Others incorporate principles of games, such as prizes or competing with friends, to incentivize people to learn more about topics generally found to be less engaging, such as finance. By both educating individuals and encouraging them to make better choices with their money, the financial technology sector has the potential to continue increasing Americans’ engagement with retirement accounts in new ways.
Witnesses for the hearing included:
- Catherine Collinson, President, Transamerica Center for Retirement Studies® (TCRS) and Transamerica Institute®, Los Angeles, CA. Read Ms. Collinson’s testimony HERE.
- Aron Szapiro, Associate Director, Policy Research, Morningstar, owner of HelloWallet, Washington, D.C. Read Mr. Szaprio’s testimony HERE.
- Tim Flacke, Executive Director, Doorways to Dreams (D2D), Allston, MA. Read Mr. Flacke’s testimony HERE.
- Brian Plum, President and CEO, Blue Ridge Bank, Luray, VA. Read Mr. Plum’s testimony HERE.