There is a shocking new figure out from Boston College's Center for Retirement Research. They say Americans have lost $7.4 trillion in pension plans and individual stock portfolios over the past year. That's almost four times greater than what Congress estimated. That's a big hit for those planning for retirement, along with workers who have already retired.
"We need to fix our problems because we have no choice," said Tif Joyce, a certified financial planner.
Tif Joyce is a certified financial planner, based in Sebastopol. He's one of six people invited to speak to the House Education and Labor Committee, chaired by East Bay Congressman George Miller.
Two retirees hard hit by the financial crisis told their stories. One of those people was Roberta Quan who is a retired Richmond teacher. She and her husband took a big hit in their retirement savings.
"As of the current July-September report, my 403(b) account has sustained a loss of $38,000," said Quan.
Her husband has the Alzheimer's disease. Medication costs $1,100 every three months.
"My situation is in shambles with expenses exceeding income. A lifetime of savings in catastrophic decline is most demoralizing," said Quan.
Another retiree, Steve Carroll, lost $100,000 on Washington Mutual bonds. Wa-mu was sold to J.P. Morgan chase for $1.9 billion.
"What a deal for Morgan Chase. We bondholders are left with zero, and who knows who will get the $1.9 billion? As the happy cats at J.P. Morgan trot down the road with our money, we seem to be left empty-handed, thanks entirely to the FDIC's amazing action," said Steve Carroll, a retired writer.
Representative George Miller (D) of Martinez says tens of millions of households have been impacted by the market meltdown.
"Many of those households have now had their income devastated by their loss in their 401k plan. In some cases, those losses will be permanent. In some cases, it's going to take a considerable amount of time to get back the value they had in those stocks before Wall Street melted down," said Congressman Miller.
An economist and senior fellow at the free-market Cato Institute, predicts the loss of retiree income will have a long-term impact on the economy.
"For the next five to 10 years, Americans are going to be saving more, and there will be less discretionary spending," said Gerald O'Driscoll, Ph.D., a Cato Institute senior fellow.
Congressman Miller is hoping to appeal to the next White House administration to include pension reform as part of ongoing efforts to rescue the economy.