Retirement Savings Lose $2 Trillion in 15 Months

By Nancy Trejos
Washington Post Staff Writer
Wednesday, October 8, 2008

The stock market's prolonged tumble has wiped out about $2 trillion in Americans' retirement savings in the last 15 months, a blow that could force workers to stay on the job longer than planned, tighten their wallets and possibly further stall an economy reliant on consumer spending, Congress's top budget analyst said yesterday.

For many Americans, pensions and 401(k) plans are their only form of savings. The dwindling away of these assets -- about a 20 percent decline overall -- is another setback at a time when many consumers are grappling with higher gas and food prices, more credit card debt, declining home values and less access to loans.

"Unlike Wall Street executives, American families don't have a golden parachute to fall back on," said Rep. George Miller (D-Calif.), chairman of the House Committee on Education and Labor. "It's clear that Americans' retirement security may be one of the greatest casualties of this financial crisis."

Even defined-benefit, or pension, plans, which are traditionally considered more stable, have been hit hard by the stock market's volatility, losing 15 percent of their assets over the past year, Peter R. Orszag, director of the Congressional Budget Office, told the House panel.

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