Americans are living longer, which is great news.  But at the same time, Social Security is predicted to become insolvent by 2033 and Americans are feeling less confident about retirement than ever before.  It is safe to say there is a retirement crisis that needs proper attention and solutions.

Any proposal to modernize our retirement system that would stand a chance of working would wisely reply on the economic power of American capital markets, which has been a huge driver of economic growth for decades.

Our retirement programs are dated and confusing, and far too many individuals are simply not saving for retirement.  A startling 50 percent of Americans had no savings in retirement accounts, according to a 2022 Survey of Consumer Finances.  In addition, 44 percent of Americans reported not having $1,000 saved for an unexpected expense.

Though these are troubling statistics, they are not particularly surprising.  Experts may excuse the lack of savings due to Americans “not being wired to save,” but with the general economic uncertainty and high inflation, the practical reality is that Americans don’t have as much expendable income to save.

Overall prices rose 3.2 percent in February of this year compared to last year and grocery bills and gas prices are still high. This inherently makes it hard to think about saving and retirement when you’re budgeting month-to-month.  But capital markets and private companies can help guide us to solutions.

The CEO of the largest asset management firm in the country recently focused much of his annual letter to investors on this issue.  BlackRock’s Larry Fink, pointed out that, back in the day, more than half the people who worked and paid into the Social Security system never lived to retire and be paid from the system.  Now, not only are people living longer, but their life in retirement is also longer.  Fink suggested that Americans working longer could be part of a fix for the Social Security insolvency issue.

But a deeper problem is that retirement and savings, and anything with finances generally, is intimidating, confusing, and/or difficult for too many Americans.  Many people need help with navigating the best options for long-term investing.  Actors in this area should find ways to make investment simpler, more intuitive, and perhaps more automated where appropriate.

There may be ways for the government to facilitate an environment where employers can make retirement investing as easy a as possible for workers.  Private companies can step up and work with investment and financial firms that have created automatic enrollment programs.  More private companies can offer matching contributions, financial advisors or human resources services to ensure employees are aware of how to take advantage of every option they have to set themselves up for future success.

It is time for everyone who is a part of this sector to focus on ways to ensure all Americans have access to saving and invest opportunities, especially for important life goals like retirement.