WASHINGTON - AS much as US$2 trillion (S$2.93 trillion) have been wiped off the value of American retirement plans in the last 15 months, said the head of the Congressional Budget Office (CBO) on Tuesday.

US retirees flee stocks ST. CHARLES (Illinois) - THIS time around Mr John Abel was ready for the stock market crash. 'Back in 2000 before the dot-com bubble burst I listened to my financial adviser and lost US$80,000 (S$117,000),' said the 65-year-old retiree in his home in the western Chicago suburb of Saint Charles. 'That destroyed my remaining faith in the markets.' ... more

'Over the past 15 months or so, pension plans have experienced a roughly S$2 trillion decline in the value of their assets,' CBO director Peter Orszag told the House Education and Labour Committee, warning that the financial turmoil is about to hit home to American families.

Some people will be forced to 'delay their retirement,' he said.

'In particular, those on the verge of retirement may decide they can no longer afford to retire and will continue working.'

Statements for the end of the last quarter of employees' private retirement funds, such as 401(k)s, are about to be delivered, noted Mr Orszag.

He estimated the funds and other public and private plans have lost about 20 per cent of their value.

The fall in stock prices have had a devastating impact on pension plans, Mr Orszag said, because a majority of pensions are wrapped up in equities.

As part of Congress's investigation of the causes and implications of the global financial crisis, the House Education and Labour Committee was hearing from budget and savings analysts to see how the turmoil will affect the American people.

Mr Orszag noted in his testimony the state of the economy will have an adverse affect on many millions of individuals' life plans, including putting off buying property and larger household items, such as refrigerators. -- AFP