If Congress and the Administration fail to raise the debt ceiling, American workers’ 401(k) account balances could fall by more than 20%, according to new research from ASPPA. That would mean more than $2 trillion lost from private employer-based DC plans and IRAs.
The ASPPA analysis gauges the economic impact of the last Capitol Hill debate over the debt limit debate in 2011 and the economic implications of another standoff in 2013. According to the study, the uncertainty surrounding the debt ceiling fight of 2011 seriously disrupted the economy, shrank total private pension assets and slowed the nation’s economic recovery. The study warns that the impact of new debt ceiling uncertainty on private retirement savings could be similarly catastrophic this fall.
“As if the uncertainty of this all-too-familiar crisis weren’t enough for America’s workers and retirees, the real tragedy is in allowing their retirement security to become another casualty of political failures by Congress and the Administration,” ASPPA’s Executive Director and CEO, Brian Graff, said in a news release.
Graff noted the role of ASPPA’s “SaveMy401k.com” website in persuading individual members of Congress to protect 401(k) plans. “We encourage all American savers to go to SaveMy401k.com and tell Congress and the Administration to stop playing political games with their retirement security,” he said. The SaveMy401k.com website is here.
