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We need a new retirement paradigm as private pensions disappear. Families must take more responsibility for their retirement by saving consistently, working long enough to accumulate enough savings, and spending their savings at an appropriate rate in retirement. Families cannot build a secure retirement by themselves, however; they need help from government and employers. This book discusses the strengths and weaknesses of our current retirement system and suggests feasible, sensible reforms to make it much better. Policymakers must put Social Security and Medicare on a sound financial footing. They should provide incentives for all employers to set up retirement savings plans and, for workers who lack access to an employer-provided plan, create federal- or state-run plans so that all workers can save for retirement. Policymakers should reform the large tax incentives for retirement saving that mostly benefit affluent families so that they help all families. Insurance markets can help families manage the risks of uncertain lifetimes and the cost of long-term care, but they don't work well. Neither does the market for reverse mortgages that could help families deploy the equity in their homes. Most companies have shut down their traditional pension programs, but they can contribute to 401(k)-type plans for their employees and encourage all employees to contribute to them as well. They can give employees the option to buy annuities and long-term care insurance as part of their retirement packages and negotiate group rates for these policies.

Retirement paradigm --- Savings