As legislators come to grips with tax reform, budget deficits and Obamacare, retirement security also iscoming under scrutiny.

In a recent U.S. Senate committee hearing on retirementsecurity, Sen. Tom Harkin, chairman of the Senate pensions andeducation committee, mentioned that people are not saving enoughfor retirement.

“I have said this before, but the retirement incomedeficit—meaning the difference between what people have saved forretirement and what they should have saved—is estimated to be ashigh as $6.6 trillion. Half of Americans have less than $10,000 insavings.”

He added that, “these numbers are disturbing—and frightening.People who run out of money when they get old see their livingstandard decline, and they lean more and more on the social safetynet, squeezing governments at all levels.”

In the past, people could rely on personal savings, anemployer-sponsored pension plan and Social Security, but pensionsare going away and Social Security is in trouble.

“Stagnant wages and rising costs are making it tougher andtougher for people to save,” Harkin said.

Although many companies have stepped up to offer 401(k) andother defined contribution retirement plans, those rely too much ona populace that doesn't know much about investing.

The committee invited companies like TIAA-CREF and Fidelity totalk about how they are helping employees cope with thesechallenges.

“I am a true believer that we need to restore the three-leggedstool, and that starts with rebuilding the pension system,” hesaid.

Harkin added that the government needs to do something to givemiddle class families the opportunity to earn a pension whilemaking those plans more attractive to employers.

Edward Moslander, senior managing director, institutionalrelationship management for TIAA-CREF, who spoke to the committee on Jan. 31, said he also is worriedabout the three-legged stool of retirement becoming unsteady.

He pointed out that only 14% of Americans are very confidentthey will have enough money to retire comfortably, and 60% ofworkers say they have less than $25,000 in retirement savings.

In research conducted among its own clients, TIAA-CREF foundthat 75% of people with higher levels of education are either veryconfident or somewhat confident they will be able to retirecomfortably, compared to 49% of the general populace. It alsofound that 88 percent of those with a higher education currentlyare saving for retirement and 60% have tried to determine how muchthey need to save by the time they retire.

Financial literacy is a problem across the country, so “webelieve it is important to offer client tools that can assist themwith making these decisions,” Moslander said. These tools includeonline programs, access to financial advisors, either in person orover the phone, and comprehensive objective third-party adviceprograms.

Lifetime income products also should play a role in retirementsecurity, he added.

“Due to our increasing lifespans, as well as the aforementionedconcerns surrounding Social Security and the movement away fromtraditional pension plans, the draw-down phase will and shouldbecome a greater focus of the retirement security discussion,”Moslander said.

The committee asked what percentage of Baby Boomers andGeneration X are likely to run short of money in retirement, basedon the current system/assumptions.

According to Employee Benefit Research Institute research, about44% of Baby Boomers and Generation X households are expected to nothave enough money in retirement, if they retire at age 65.

Retirement income adequacy is defined as having enough financialresources to cover basic expenses plus uninsured medical costs inretirement, according to Jack VanDerhei, research director forEBRI.

In May 2012, EBRI projected that the retirement shortfall forearly Baby Boomers, those born between 1948 and 1954, vary fromabout $70,000 per individual for married households to $95,000 forsingle males and $105,000 for single females.

“The aggregate retirement income deficit number, taking intoaccount current Social Security retirement benefits and theassumption that net housing equity is utilized 'as needed,' as wellas uninsured health care costs, is currently estimated to be $4.3trillion for all Baby Boomers and Gen Xers,” VanDerhei said in hisresponse to committee questions.

Women face an even greater challenge. Recent EBRI data foundthat the retirement savings shortfall for single Generation Xfemales was $133,000. That amount is the average additional amountof savings needed at age 65 for at-risk single females in that agecohort not to run short of money in retirement. Thirteen percent ofthese single women could have shortfalls in excess of $200,000.

The biggest deficits are for women who work for companies thatdon't offer a 401(k) plan.

Retirement adequacy can be improved with the presence of definedbenefit plans, having future eligibility for a defined contributionplan and increasing default deferral rates to 6%, VanDerheisaid.

This article was originally posted at BenefitsPro.com, a sister site ofCredit Union Times.