The AtlanticIn “By 2050, There Could Be as Many as 25 Million Poor Elderly Americans,” I cast a pall over some good news from the National Reverse Mortgage Lenders Association. They celebrate that the value of older Americans’ homes is growing faster than their debt. I show how poverty among the elderly will increase by 180 percent over the next generation.

My bad news is the result of some simple back-of-the envelope calculations. As the Baby-Boomers retire, the number of elderly Americans will grow by about 106%. Due to America’s deteriorating retirement system, a growing share of them will be in or near poverty. The result? The number of poor retirees will increase from 8.9 million in 2010 to about 25 million in 2050 -a jump of 180%.

The good news is this scenario is not inevitable. To avoid a retirement crisis, we need to take two steps. First, expand - not cut - Social Security. Second, implement Guaranteed Retirement Accounts (GRAs), mandatory, pooled savings accounts to supplement Social Security which will let all workers enjoy a comfortable and dignified retirement.

NYTIn this Sunday’s New York Times, Mark Miller writes about my alliance with Blackstone President Tony James to advocate for replacing 401(k)s with a mandatory retirement savings program.

Since I first proposed Guaranteed Retirement Accounts (GRA) in 2009, the effort for reform has gained steam as policymakers recognize the chasm between what experts recommend people save and what they actually do. Most Americans, even in the upper-middle class, have saved nowhere near enough for retirement.

The will for reform is present abroad and at home. Britain, Australia, and New Zealand have all implemented mandatory retirement programs of their own within the last generation to great success. In Britain, workers can expect to receive 71% of their salary in retirement. Three US states have enacted universal pension plans since 2012, and another 23 are considering a variety of proposals. State action is a response to federal inaction, and state policymakers would prefer federal reform.

Last month the US Treasury debuted its myRA program, which makes government-sponsored starter IRA’s widely available. But since myRAs are voluntary and small, most experts expect their impact will be limited. Nonetheless, they reflect a broad recognition of the need for reform. We need more alliances between academics and business leaders to bolster the case for federal retirement reform.

Today’s unemployment report - while good news for the overall economy - reveals that the number of older people in the labor market continues to outpace population growth. While we all know the number of older people is increasing as the Baby Boomers hit retirement age, this isn’t a story about demographics. It’s about a larger percentage of older workers relying on the labor market. Tweet: #JobsReport reveals hidden surge in # older workers dependent on labor market @tghilarducci

You can see this trend in both the shrinking unemployment rate for older workers and the increase in their labor force participation rate. In November, the unemployment rate for older workers was 3.7%, one of the lowest since the beginning of the recovery in 2010. More people are working or looking for work.

Number of Older Workers Grew Twice as Fast as their Population

The labor force participation rate, like the unemployment rate, includes both those looking for work as well as those who have jobs. In November, the participation rate for workers 55+ was about 40.2%, close to its peak of 40% in 2012. In 1995, only about 30% of workers over 55 participated in the labor force, an increase of 124% over the past 20 years. As a result, the labor market is flooded with 35 million older workers. In contrast, the number of prime-age workers (those between 25 and 54 years old) has not grown as fast as the prime-age population. The labor force participation rate of prime-age workers fell to about 80.7% from 80.8% in 1995.

Why are more older workers in the labor market? Given the crisis in retirement savings, some are unable to leave due to inadequate savings, the increase in 401(k)-type plans, and the lack of affordable health insurance.

Cutting Social Security benefits through raising the retirement age leaves work as the primary solution to the shortfall in retirement wealth. While it may look good to see an increasing demand for jobs among older people in an expanding economy, this rosy scenario doesn’t account for bargaining power. If the surge in older workers continues, the job market for all workers takes a hit in lower wages and increased competition between old and young.

The solution is to ensure retirement income through Guaranteed Retirement Accounts. This benefits both old and young. Older workers would have the choice to retire at their current standard of living and younger workers will see an increase in the supply of jobs.

How to Retirement with Enough MoneyI’m honored that Geoffrey James at INC has included my new book “How to Retire with Enough Money and How to Know What Enough Is” as number two on his list of 12 New Business Books for the Perfect Gift.

It’s a short read--maybe even a single-sitter--that explains why experts recommend you retire with at least 8-12 times your salary saved up, and offers some best practices to help you get there. It’s also a primer on current retirement policies, and contains some suggestions for states and the federal government to help all workers to retire comfortably, like Guaranteed Retirement Accounts.

The book will be available on December 15th, but you can pre-order it today.

The AtlanticIn “The Welfare State: A Terrible Name for an Essential System,” I discuss how the social safety net protects Americans from immiseration when they’re unlucky and props up consumer demand in downturns.

The welfare state is especially important for the 30% of American workers who are part-time and the roughly 8% more who are temps, self-employed, or on-call, and don’t have access to employer-provided benefits. For the most part, these workers aren’t eligible for unemployment insurance, so if they can’t find work in a recession they may rely on Medicaid and the Supplemental Nutrition Assistance Program (commonly called food stamps) to survive.

The perennial question, rehashed every presidential election season, is how robust should America’s welfare programs be? Today, the word welfare has a negative connotation, particularly among Republicans. But the concept of a basic income - now widely regarded as a fringe idea - once had the support of Richard Nixon. In the past hundred years, the welfare state has steadily and incrementally improved, from Social Security in 1935 to the Affordable Care Act in 2010. The American welfare state has the same skeleton as more robust welfare states like Denmark and Sweden. The question is how much meat should be on the bones.

Book CoverOn November 21, 2015, Institutional Investor published Mark Henricks’ review of my new book, “How to Retire with Enough Money and How to Know What Enough Is” (available December 15th). He describes the book as a basic guide to retirement security for low- and middle-income earners, containing the standard prescriptions (save early, save often, and delay taking Social Security until you’re 70) while offering much more.

Specifically, Henrick calls the guaranteed retirement account (GRA) proposal my “primary intellectual contribution to retirement planning.” GRAs are nationwide mandatory savings plans to which workers and their employers would split a contribution of at least 5% of their income. Funds would be pooled and invested in low-cost index funds, managed by the federal government.

GRAs are the solution to what Henricks identifies as the big takeaway from the book: the failure of the “do-it-yourself” retirement savings experiment of the past 35 years. When people are left to rely on employer-sponsored retirement accounts - to which only half the workforce has access - they don’t save enough. Most Americans over age 50 have less than $30,000 in their retirement accounts. This trajectory leaves half of Americans with a food budget under $5/day in retirement.

Ordinary savers aren’t to blame, given the one-two punch of wage stagnation coupled with the complexity of long-term planning in the 401(k) system. Rather, the lack of retirement savings is a systemic failure with a simple and straightforward policy solution: GRAs.

Eduardo Porter summarizes his point in today's Economic Scene column in the New York Times when he states, "Tax expenditures die hard."  As an economist, I have long called for reform, working to raise the issue during the many deficit commission and budget negotiations since the 2008 recession took over the nation's headlines. As Porter correctly notes, a little sunshine on tax expenditures could be a game-changer in terms of who gets what from Washington.

Porter echoes my argument that tax expenditures are both inefficient and regressive through his analysis of the lopsided effects of $1.1 trillion in tax breaks that are designed to promote social policy - like housing, medical insurance and retirement savings- but operate through the back door of the budget. Because these tax breaks – or foregone tax revenue – never see the light of day in a budget hearing or as part of the annual appropriations process in the U.S. Congress, it often goes unnoticed that they don't work.

In October of 2015, SCEPA co-hosted "How Can Tax Reform Address the Income Retirement Crisis?" with the Center for American Progress. We discussed the erosion of American's retirement security and how the tax code can be used to encourage retirement savings. SCEPA has also gone directly to Capitol Hill, holding a briefing for lawmakers, their staff and advocates in October of 2010. David Walker, former Comptroller General of the U.S., called for the need to implement statutory budget controls that address tax preferences, and and Eric Toder of the Urban Institute presented data supporting the fact that the well-off are more likely to benefit.

Retirement savings tax breaks are particularly lopsided. Rather than increasing retirement plan coverage and savings rates, most of these subsidies go to high earners who already have adequate retirement savings and can simply shift savings to tax-favored accounts. A 2005 GAO report cites research showing that no more than 9% of savings under the IRA tax expenditure are new savings engendered by the program. Taxpayers in the highest-earning 20% claim nearly 80% of the total benefits of entitlement programs for retirement accounts. If the total sum of these tax breaks were turned into tax credits, every taxpayer would receive $600 per year.

This behind-the-scenes tradition trickles down to the states. With little fanfare or acknowledgment, many states pass through these tax breaks. In Connecticut, New York and California, a credit would yield an extra $53, $158, $145, respectively. This means that on top of a federal tax credit, taxpayers in New York could receive as much as $758 per year to contribute to their retirement account. This may not sound like much, but it would be seed money for the workers who need it most: those that have little to no retirement savings.