 This is such a great subject and I just want to give a plug that this whole session is kind of a preview of what we're going to be doing in Slate starting in a few weeks, so there is going to be a lot more of this discussion going online starting later this month. So if you think that dozens of great, great grandparents and great, great grandparents creates an etiquette problem, think about the social and economic problems that could come from all of those people having nothing to do all day. And our next panel, can we ever retire, would we ever want to, is going to consider workplace and financial implications of increased longevity, especially for people who are planning and thinking about retirement. And to moderate the panel, I want to introduce to you Matt Iglesias, where you met, there's Matt. Matt is Slate's business and economics correspondent. Before he came to Slate, he worked for Think Progress, the Atlantic, TPM Media, and the American Progress. His first book was called Heads in the Sand, published in 2008, and his more recent book published last year was The Rent is Too Damn High. The brief bio would be that if you want to sound smart about what's going on in Washington about business and economics, you read Matt, and it works particularly well because he writes many, many times a day very concisely, always adding some fresh point that you haven't thought of. In his money box column on Slate, and his column, I should add, is a finalist for the 2013 Online Journalism Award. Welcome Matt. Do I have my panelists here somewhere? Otherwise, it's going to be difficult. But we should be joined by Mark Wachowski, who is the director of retirement research with Towers Watson, as well as a former vice chairman of the Federal Commission on Long Term Care, Lisa Mensa, who I apologize if I'm mispronouncing everyone's names. This is a whole panel of people, myself included, with slightly odd names. Executive director of the Aspen Institute's Initiative on Financial Security, and Jamie Calamaridis, as senior vice president with Prudential Retirement. Of course, our sponsors here. Anyway, to sort of kick things off, I think it's worth sort of saying I think the idea of living longer, of greater longevity, it's very optimistic. I think most people don't really want to die. But it places sort of significant financial challenges on people to know how to save and how to save for a longer retirement and what that ought to look like. Particularly if we're thinking of a world in which people may need to work longer because savings won't necessarily extend that far, but also may need to financially plan for certain kinds of transitions in life. And so I wonder, Jamie, when people are thinking about what sort of savings they're going to need to retire, how much does it matter what kind of a life you're envisioning for yourself? Are you just going to draw their savings down or supplement it with work? And how should people be thinking about this? Well, I think that the definition of retirement itself is actually changing. I think that oftentimes we think about retirement as that 1950s definition of withdrawing from working environment. And it turns out retire comes from the French word, today, right, did you draw. And redraw is probably a better definition of how millennials and many people are thinking about retirement. When we ask people what they're going to do in retirement, the number one thing they say is work, which sounds counterintuitive, but they want to do what they love. And in fact, I think that most individuals who are young and not yet 10 years within the retirement age that we normally think of, 65, 67, they can't envision retirement and they actually procrastinate and they have a really hard time thinking about saving for retirement. People who are closer to retirement, 10 years or so, have some sort of life event that makes them start thinking about retirement. And most people start building a retirement paycheck in their mind from all their sources of wealth. Hopefully they've been auto enrolled and they've started saving in their 401k or their workplace. But we're finding that today's workers are facing a challenge about 10 to 15 years in advance of retirement. Right, absolutely. And Lisa, you know, this is very much, I mean, there's a lot of inequality in the United States economically and this sort of continues into the retirement space and our more working class families and people who may have, you know, jobs that are more physically arduous. You know, how do they need to think about this and how do policymakers need to think about those sort of class bound challenges? Yeah, thanks, Matt. I think that Jamie's right, we're re-envisioning retirement but everybody's going into this not the same way and you're right to think about this as well. If you've been hoisting up people or working on your feet or greeting at Walmart, one, you probably, often you weren't in the system. You weren't building the retirement all along. So much of America and it's a stubborn statistic. It's a stubborn statistic of about half of the workforce that hasn't been amassing private savings. And for, but for all Americans, the social security system is the financing tool that really sustains the base line of there. So I think many workers, no matter class, are still counting on both a robust social security system and they want more. I think that's where the real policy debate is. If you remember anything, it's really that we're heading into this question, how would we ever retire? How would we ever pay for it? With a two stroke system, with our social security system and then everybody, even that greeter at Walmart, wants more than that, wants a private saving system and that's where the challenge has been. How do we build that on top of the social security system? I remember when I was first taught public policy in college, they spoke of a three legged retirement stool of personal savings of social security and of pension plans through the workplace, which you've obviously gone into a substantial decline, but do you think that still has any kind of role to play? Well, I think there's certainly a stellar role for the employer because the employer has an interest in providing a retirement plan because at least in certain industries and in certain organizations, they do want to see a natural turnover and younger workers coming in and an ability of older workers to leave with dignity. And that's particularly in those type of industries that we're talking about where there's a physical element to leaving. However, with that being said, there's a range of experience and there are other organizations, employers that just, they don't really, it's not that important. It's not important to the organization, it's important to the employees. And so some organizations respond to the employee's demands, but there are other ways for employees to get those what they need and that could be through private savings or working. So there are other ways of dealing with those issues. So what would we need to do to sort of get more participation from people? I think it's about half of people are in workplaces where they're eligible and about half aren't, right? So that's a really important public policy issue of how do you get people to have more access to savings? We know that the best determinant of whether or not someone's prepared is whether or not they're saving at the workplace. And for organizations, companies that have workplace-based savings tools, participation tends to be fairly high because of new public policy solutions in the odds that allow companies to automatically enroll their employees. So where is coverage not available? It's not available at the smallest employers, those with less than 100 employees. And who do they hire? They hire mostly women, mostly people of color, and mostly low to moderate income individuals compared to mid-size and large-size organizations. Only 25% in some measures of small businesses offer workplace-based retirement plans. And we see three barriers for why they don't. They are perceived to cost too much relative to the retail alternatives. They are administratively difficult to administer because of the rules that we've put around them. And small business owners are individually fiduciaries. That is, they are personally liable for the workplace-based retirement plan. The good news is that there are a number of initiatives and ideas about how do you allow small businesses to pool their purchasing power, or how do you simplify the fiduciary responsibility? Did you want to jump in? I want to pick up, I think Jamie's really noted what is a big policy challenge. And many in this room know it, but is how do we build a system where everybody can be in? And I love the word simplicity and automatic. And those, there's a great book out called Scare City and it talks about our bandwidth and why everybody's challenged. This isn't, you know, you talk to anybody on the street and they'd love to try to build their nest egg. But somehow the reason workplace savings works is it's fishing where the fish are. It's where the money is. And we make our money at work. And somehow we need systems that are more simple and automatic. And those are the big trends of the policy movement. Can we make it more automatic? And especially for people who are working in very small businesses or self-employed, ask any cab driver or anybody who cuts your hair, what's their plan? And we know that if it's not structured and made simple, and so, you know, the president proposed and making it all automatic, making it optional for the individual, they can opt out, but making it payroll time. Just so when you get your paycheck, you're saving a little in a private account. And I think that the trend, it's hard to back away from things that are automatic and automatic to your favor. If somebody could do that with my diet, I would really love it, but they can do it with my money. Yeah, I've had a similar, similar experience trying to resist the bagels and it's... I wanna add another viewpoint, and that is although the 50% number in terms of any one point in time, people who are covered by retirement plans is a steady number. And it's certainly been true over many, many years. And so it's a little more complex than that when you look at the number of when people retire, and in particular, when you look at it as a household, a couple, how many do have retirement assets, formal retirement assets? It's a higher number than that. It's more like 70% because people do go from job to job. Sometimes they're covered, sometimes they're not, but they still keep those assets with them until they retire. And similarly, when you consider, relating to the prior panel, many people are married, and they stay married through retirement. It's both... And the law is sort of, it recognizes that it's the assets of a couple, not just the individual worker. Right, right, right. So that's a little bit more of an optimistic take up, but at the same time, I mean, it's certainly been my experience. I've been in the workforce 10 years and I've had, I think, four different jobs and I've always been fortunate to have sort of some retirement provision at three of those employers. And yet, even just the logistics of keeping track of that can sort of get very complicated. I mean, is there things we can do to sort of make the policy account for the fact that the savings comes through the workplace, but also people are gonna have many different workplaces over the course of their lives and integrate. I'm familiar with private organizations that have been popping up that deal with exactly that issue. So I think even within the rubric of current law, there is a possibility of aggregating those savings. And I'm sure organizations like Prudential are interested in that type of thing. Indeed, there are methods to make sure that your savings are aggregated over time, but there is continued work to be done on a public policy basis for any sort of coverage solution to make sure that as people switch jobs, they don't cash their money out. There is a behavioral issue that we, as human beings have, and that is a bird in the hand is worth more than two in the field. So if you see a large savings amount and you switch jobs and someone says, would you rather have the check sent to you or would you rather have the check sent to your savings account? The vast majority people take the check today and unfortunately are sacrificing their future financial security. Well, and so along those lines, I mean, this is one of the reasons why we have social security as a kind of a retirement floor for people that's gonna guarantee it to be there. But I wonder, Lisa, how does that play into sort of increasing longevity? You often hear about the sort of extra fiscal burden that's involved, but also the way social security works, it becomes sort of much less favorable as you live longer and longer years, as I understand. Or priceless because it's there and it's inflation protected and you get it until you die. This is the leg of the stool. What was lost in a private pension for those that had them and there were women and minorities and many who never had them. But that's the piece that is still there. So in one way, it's the most powerful annuity America has, however, it could be improved and polling shows that most Americans of both parties would favor improvements, particularly at older ages. So we are more sympathetic to our 80 year olds getting a bump up when they can't work anymore or aren't drawing a big salary and when many private savings. And I think the real truth about the social security system is how beloved it is. And not just from the people who are receiving it from the kids that don't have to pay for their parents or their grandparents too. So that and that really is clear. Go ahead. Yeah, I was gonna say with our social security it certainly provides a very important base and it does establish the concept of retirement very clearly. And I think that despite any increases in longevity, we will still want to retire even in the traditional sense, eventually on the workforce when we're in our 70s and 80s. And then there also is obviously some people have to retire because of health. But social security provides that base, but it is a very, I'll use the word old fashioned program. It really reflects a view of the 30s, 40s and 50s both in terms of marriage, which we talked about before in terms of when you retire. So the ages are written in law from 62 to 70. And that was true in the 60s when that was designed. So I think we really do need to update social security to reflect what already has happened to say nothing of what we can expect to happen in the future. We also need to educate individuals as they're approaching retirement about what their choices are today. Too many people are doing that bird in hand and taking money at age 62 as opposed to giving themselves a raise using some of their savings today and postponing social security until 67 or 70, which gives them a greater annuity for their lifetime. That's a hard financial burden to get over mentally to say I'm not gonna take social security right away, but one that might optimize their financial security for their lifetime. Well, and I think that speaks to sort of one of the larger points around private retirement, which is that most people seem to not be just very good at sort of doing some of this math in their heads. And in addition to people, people maybe don't save enough, but they don't always save in the right kind of ways. They panic if things are down or they hop onto bandwagons when it's too late. And what can really we do in the media and the private sector to help people sort of understand the savings landscape better? Well, I was gonna say on the accumulation side and on the savings side, both because of private sector initiatives, but also because of policy, there is the innovation of so-called target date funds, balance funds, which basically make the investing a little more automatic. And they do address the issue of jumping in, I don't know, off the bandwagon. So people can take a little less attention a little less anxiety about their investing. I think what is needed and really has not really been developed yet is something similar when people retire, particularly when they no longer have a defined benefit plan. And I think it's actually sorely needed. Both public policy needs to encourage it and the private sector needs to step up to it. Mark, I think that's exactly right. It's how do you have defaults so that people avoid making mistakes? What we have seen is when those lifetime income solutions are available, and it doesn't matter what sort of lifetime solution are available, individuals have better behavior during the accumulation. They save 38% more when there is lifetime income available. They don't buy high and sell low in volatile markets. The metaphor is you approach the largest bridge you've ever seen in your life. Your loved ones are in the car next to you. As you approach the bridge, you see that there's a commotion and you realize there are not guardrails on the bridge. Do you drive over? Do you drive over slowly? Do you speed up and drive over quickly? Now I'll ask another question. Have you ever hit a guardrail going over a bridge? What's the purpose of the guardrails? The purpose is to make you feel comfortable and behave appropriately. The interesting thing is we've solved from an industry and a public policy point of view the accumulation and target date funds. There is not widespread use of lifetime income products within savings plans. We would assert that that presence is the guardrails on the bridge. It allows people to feel more comfortable. There's nothing that stops people from putting it in right now. There's a lot of behavioral hurdles to put them in. And a lot more innovation that can continue to happen in this area. I wanna build on Jamie's bridge metaphor because to me it seems like we've still got a lot of people that didn't get a car. Yes. All right. I think that what you in the press can help us do is we're just very bad at getting a car. It's really hard when you are working three jobs to think about the car. So we need more help in getting over this big coverage hurdle. It just should be more automatic. That is the beauty of social security. Everybody's in. So helping us with automatic and most of us just can't do it. We just can't follow the stocks and the bonds and the doubts and even when we do it, we're bad at it. So why not admit defeat on this level and at least be part of an automated baseline? The biggest innovation would be starting the whole savings thing at birth and that's been, that was tried in the UK and the amazing people came into this system. People have aspiration. I always say there's no shame or blame when you're just born. So we haven't done anything wrong yet or not overweight. We haven't messed up our budget or just a baby. So starting, you know, there just needs to be a bigger American buy-in to the savings side of this equation. You know, we're great consumers, probably best in the world. And we've got to consume this savings a little more normally in our DNA and that's been a big miss. I think the other thing is just more is better in this case. More savings is better. So if we had a few things- Busses and trains instead of cars. Well, people rarely find themselves regretting having saved too much. You know, you can always do something fun with your grandkids later if you end up in that situation. I think it's about time to pivot to questions if people have any in the audience. Yes, you? I know that a lot of my friends and a lot of people that I've worked with are concerned not just about saving for retirement but also dealing with college loans and graduate school loans that they've taken out. And I think that the idea of trying to make that balance between how to have a fulfilling work life, save for retirement, do all of the right things but you have what is now becoming sort of astronomical debt. How do you balance that? And how do we as a society sort of respond to that? I mean, at some point, obviously, I think there've been lots of thoughts put out there about how, well, of course, the cost of college, the cost of advanced degrees will have to go down and that will happen. But there is one, two, possibly three generations that will still be experiencing that and that will, at me as a society, will have to address that. And I was wondering if you could speak to that. Yeah, life cycle. You bet. I'm financial security, so I love your question because I think it is all of a piece. And the problem with retirement is we only think of it once we have our first bulging disc after 40 and then we miss the first phase. So I think your question is really deep because it shows where the key assets that we need are challenged at every spot in the life and what we do as policy in this town is we reward and make prosper the things that we value the most. So we have choices about how we bring down and subsidize the cost of college and how we help people prepare and save for that but also how we finance it. I would also think this is the way, if we know we need 10% contributions to our retirement funds every year, that's the real secret. We should be putting away 10%, like biblical 10%, right? So how do we get there? One way we could get there is matching people's savings. And if your employer can't do it, especially if you're at a tiny small business or if you're a hairdresser, that's where you need a tax credit at savings. Some of this should be automatic and not even, you just earned, you socked away $1,000 in a potential account and we rewarded you 500. So some of the lift would be taken from you. So I think three key assets, homes, retirement and college, I think we could do a lot more to protect the cost to subsidize and accelerate how you got all those assets because they're of a piece. So I love your question. Yeah, I agree that it's a very important question and both current law sort of, I think helps you address it in one way and another way it makes it difficult because if you're, again, if you're thinking of it from the point of view of a very long life cycle. So you may need to spend a lot of money in the early years for college and graduate school and therefore you have less money available for retirement but in law there is something called a catch up contribution that you can make into your retirement plan after age 50. So that's meant to solve that problem. But so that's a good thing in current law. The problem in current law is that there's also something called minimum distribution requirements which started at age 70. And those age 70 was picked in 1960. That was really old, 70 is not old now. So law has a lot of adjustments to make in that regard. And I think it would help, again, I think when you go to college or go to graduate school you're not thinking of next year, you're thinking of your whole career. So I think it's best to think of these things in terms of a life cycle. Yeah, go over here. Hello, thank you so much for having this amazing panel and for each of you being here. I'm one of the thousands of feds that are furloughed. I have, we are not allowed to work. I was told that we will not receive any salary for perhaps three to four weeks or more. And many of us are looking to our retirement savings for hardship loans, which is the absolute worst thing to do. But we have no other options. I've wanted to ask, what do we do? And what can we do to turn Congress upside down so we can get back to work? We have work to do. So I just had to say that and thank you so much for your reply. Thanks for your question. It's Lisa identified three areas for big savings, house, education, retirement. When you sit down with financial planners they always start with a fourth as well and that is in a set of emergency savings. Financial planners will tell you to save three to six months of salary for financial emergencies. They were not envisioning a situation at the federal level when they were suggesting that and that's not our forecast but that's what financial planners suggest. The challenge with that is that those numbers seem daunting when you add up all those things. So the implication is start today and save what you can and adjust your budget and your lifestyle and then pay yourself first when you get a raise. Don't take it out of your paycheck but instead pay it to your savings vehicle and keep accumulating it over time. That's what behavioral finance experts suggest is the best way to anticipate that over time. Of course now that we're in this situation I think everyone should ask Ted Cruz if he wants to give you a loan for a couple of weeks until he can sort of get this sorted out. May we hear from you? Thank you. Patrick Tucker with the Futurist Magazine. I just wanted to briefly couch my question in terms of one of the comments that Jamie said which is that young people don't think about retirement. I recently sat down with a group of about five or six people under 30 and I asked them actually if there was a financial planning book that they particularly liked and they all said the four hour work week by Timothy Ferris. I know we laugh at it but it's actually sort of a manual for early retirement by creating a passive income vehicle online and it's a very optimistic manual but I think that it's sort of fascinating and so that group was not necessarily representative of a whole but I think that it does speak to a growing mistrust among young people of both the private sector and the government to provide financial safety later in life and so this question is really for the whole panel but especially for Matt, do you perceive a growing sense among young people that entrepreneurship is supposed to take the place of like conventional family planning or financial planning, not family planning, financial planning among young people? Well you know I think that with the popularity of that kind of book or occasional features on people who manage to retire very, very young tends to show is that there's a certain benefit to finding ways to sort of reframe the idea of savings as a little bit more positive that it often sounds like a bummer, like someone's saying, don't get that TV now, just put it in your 401k and that's really boring and if we can make ways, I mean I know this is obviously, it's like credentials trying to do with its marketing but it's to make people be more excited about the idea of saving for retirement and look forward to and think of it as a benefit for yourself but this does go to at least this point about what realistically do people have access to in their lives, that the most acute problems are with people who are facing real difficulties in savings and I don't think, I mean it would be great if everyone could start successful companies but that's like three barriers higher. I think with the question and not your comments our response to is the need to reframe the question about retirement, to make it positive, to engage everybody in thinking about positive aspects of deferring pleasure today, having spending money for pleasure tomorrow and it's difficult, it's difficult. 80% of individuals aren't involved in their financial planning, it doesn't matter what age perspective, what age and what income level. We find that almost half of individuals don't look at their statements on a regular basis either out of fear or just not of out of interest and the issue is how do you get those individuals engaged and thinking about positive actions today and avoiding downside mistakes today as well? I think Matt that we will have a transformed relationship with money as we look forward and I think your generation is gonna help us. There will be apps or whatever the next thing is for helping us manage on a day to day. I spend most of my life thinking about the future assets. I think there will be ways to connect it in the way we spend, you know, that when B of A came up with there, keep the change, it was this radical idea, hey, I could be at Starbucks and contributing to my savings account too because I'm rounding up and I think that's the whole transformation is coming and I think, but it's gotta be simple, automatic and sort of put us on the right path automatically. Absolutely, I do go over there. Do you think a lot of us have enjoyed like Mint.com and other things that simply let you track what's even happening in your life? Hi, I'm Jennifer Huang of the Kaiser Family Foundation. I work for the program in Medicare policy so I actually think about our time in quite a bit. We put out a report recently on the racial and ethnic disparities in income and savings and home equity of the Medicare population and in 2012, nearly all Medicare beneficiaries had some sort of savings which includes retirement accounts like IRAs and 401ks and other financial assets including savings accounts, bonds, and stocks. But there's a huge disparity between white beneficiaries about half of whom have over $86,000 in savings compared to black and Hispanic which is something more like half of beneficiaries have less than $12,000 in savings. And this disparity persists across a bunch of different demographic factors including education and it's also projected to persist well into 2030. And I was just wondering, do you see this disparity widening? Do you see the gap closing as life expectancy continues to increase and what can we do on a policy front to target or specifically reduce that disparity? I mean, one issue of course is that the disparity, I think, and obviously I'm not familiar with the specifics that you're citing, but in general, it's related to lifetime income, lifetime earnings and that so there is that disparity but it sort of just continues on into the retirement years. So I think it relates in term to a discussion about some people are gonna rely much more on lower income folks on social security whereas people in social security is not intended as the sole or even main retirement vehicle for people in middle and upper income. So I think there, and when you add in the house and other sources of value, it's a rather complex story. And I think we need to be very flexible to sort of respond to those. I wanna thank you for raising the numbers and even bringing your notepad with them because the difference between 86K and 12K of financial assets is extreme, but it's also reachable. And I'm the rat of, I spoke to the asset funders yesterday who are very concerned with the racial wealth gap. But when you think about it as a financial matter, the difference between getting someone from 12K to 86K, if you had time and you had a little different way of financing house and financing the financial assets, we've left too many people without the car in the first place. I know Jamie can get many accounts if he has 20 years of people putting in even 5K, 3K at the beginning of work with matches, he can close a lot of that gap. And I think that's the, first of all, we have to be appalled at the distinction, particularly in this era, we should be appalled. And but the real research on what's driving those big asset limits goes even beyond lifetime income. It says people didn't invest in high-yielding assets or they were overweighted in house and not ever being in the stock market ever. So I do think we're, we actually know how to deal with 60 and $70,000 gaps over a work life. And there are small changes. The things we're talking about are small changes in public policy that make big differences. There are inequities that we need to fix as well to tackle this problem. If we start having coverage among low to moderate income, retirement savings counts against food stamps. It counts as an asset that disqualifies you for food stamps. We can fix these sort of public policy inequities along the way. Yes. Yes. You can go. So think about scenario C. What level of retirement savings do we need to engage in? What do payroll taxes need to be if retirement is a hundred years long? And I mean, there's this typical response that, well, that's really easy. We just keep on rationing up the age of retirement, but there's this really quick retort, which is that life expectancy at 70 is really variable as a previous question asked or pointed out, that that tends to track very heavily with income or difficulty of the sort of work that you're engaged in. And it's really easy to say, well, let's just ratchet up the age of retirement when we have sedentary mental jobs. But that's really unfair to people who have really physically strenuous jobs who have really different health expectancies. How do we cope with that? Yeah, can we differentiate the retirement system better according to people's actual circumstances? Well, it's hard to answer your question in specific terms, but in general terms, if we have scenario C in general, I think it's reasonable to expect that people would, on average, and for most people, would work longer. It just seems natural to think in those terms. With regard to your specific question, I think it's both a responsibility of these three levels. It's the responsibility of the individuals, the responsibility of the employer, and it's the responsibility of society to deal with those, I won't even call them outliers, but that complexity of people who may need retraining. And they may need, or they may need an employer plan that recognizes that they're gonna retire earlier. So I think that's what we need to respond, both to the general trends that affect the vast majority of people, as well as the specifics of those situations. And I would build, I think you've really identified where responsibility is shared, but the social insurance systems, America didn't choose Europe's path. Our social security, and it is old, it's 75, but we chose a system that was intentionally not a complete picture. And if we live long and prosper, and we've got a long, much longer tail, our social insurance system, it'll be a piece of it. There'll be a society, a societal role, because we're not all the same, and some piece of social insurance does something that private insurance doesn't. We've got to pick up more of us, and all of us being in. So I would predict, even if we're, instead of an aerial sea, and we're all living long and prosper, I would predict that we're still gonna need a pretty strong core of social security and Medicare system, that's our social insurance piece. And then John marks other pieces of what we do privately and what we do at the workplace. All right, I've been signaled to, I'll share everyone off the stage, so. Thank you very much for this discussion. All right, some excellent issues, and back over to you.