Teresa Ghilarducci, after having taught economics for twenty-five years at the University of Notre Dame, now holds the Irene and Bernard L. Schwartz Chair of Economic Policy Analysis at the New School for Social Research. She is also the 2006-2008 Wurf Fellow at Harvard Law School. Her books include Labor's Capital: The Economics and Politics of Private Pensions.

• Introduction 1 Part I The Attack on Retirement Chapter 1: Hope for Retirement's Future 7 Principles for a Pension Rescue Plan 8 The Successes of the U.S. Retirement System 10 Three Beliefs That Threaten the Pension System 17 Individual Retirement Accounts: Current Reform Ideas Fall Short of a Vision to Successfully Preserve Retirement 23 Conclusion: Retirement's Future 25 Chapter 2: The Collapse of Retirement Income 26 What People Need in Retirement 26 What People Think They Know: Retirement Income Expectations 28 Predictions of Retirement Readiness 30 The Five Parts of a Retirement Wealth Portfolio: Four Are Failing 32 Distribution of Retirement Income and Distribution of Retirement Readiness 42 Women Face Special Pension Circumstances 44 Pension Futures for Workers with Moderate Incomes 53 Conclusion: Failures of the Current U.S. Retirement Income Security System 56 Chapter 3: When Bad Things Happen to Good Pensions--Promises Get Broken 58 Defined Benefit Pensions and the Road to a Middle-Class Retirement 59 Diminished Defined Benefit Plans 60 The Paradox of Overall Pension Stagnation 66 Workers' Demand for Defined Benefit Pension Plans 72 Why Workers Don't Like Defined Benefit Pension Plans 78 Lump Sums and Defined Benefit Plans: A Cure that Creates the Disease 80 Box 3.1. The Story of Lump Sum Payouts 82 Why Firms Like Defined Benefit Pensions 84 Box 3.2. The Story of the Miners' Union's Pensions: How Secondary Markets Are Transformed 87 Employers Who Do Not Sponsor Defined Benefit Plans Prefer 401(k) Plans--or Nothing 90 Legacy Costs: Defined Benefit Plans Do Not Kill Companies 92 What Should Government Policy Do? 95 Policy Options 96 Conclusion: When Bad Things Happen to Good Pensions 101 Appendix 3.1. The Pension Protection Act of 2006 103 The Pension Protection Act: Destroying the Defined Benefit System as the Way to Save It 108 The Effects of the Pension Protection Act of 2006 112 Conclusion: The Pension Protection Act of 2006 115 Chapter 4: Do-It-Yourself Pensions 116 Trends in 401(k) Plans 117 Advantages and Disadvantages of Defined Contribution Pensions 118 Longevity, Investment, Financial, Inflation, Political, and Poverty Risks 122 Box 4.1. Investment Management Fees: The Politics and Profits 128 Causes of the Shift to 401(k) Plans 130 Box 4.2. Are 401(k) Plans Cheaper Than Defined Benefit Pension Plans? 133 Conclusion: Do-It-Yourself Pensions 136 Chapter 5: The Future of Social Security 139 How Does Social Security Work? 139 Issues in Social Security Financing 143 Box 5.1. Why Did the Greenspan Commission Get It Wrong? 150 The Personal Savings Account Plan 154 Box 5.2. Advance Funding Retirement 156 Motives for and Likely Effects of Personal Savings Accounts 157 Fixes that Maintain Social Security's Basic Structure 164 Political History of the Social Security Program 169 The Debate over Social Security: Some Things Never Change 172 What Is New in the Social Security Debate? 175 Conclusion: The Future of Social Security 178 Part II: What Is Good about America's Retirement Income Security System Chapter 6: The Short History of Old Age Leisure in America 181 Retirement Leisure by Generation 181 Repositioning the Retirement Idea 186 Praising and Promoting Work 188 Can the Elderly Work More? 190 Affordability: Are Pensions a Form of Fiscal Child Abuse? 191 America's Unique Pension Debate 192 Policy Implications of Repositioned Retirement Norms 194 Conclusion: Old Age Leisure in America 195 Chapter 7: The Distribution of Retirement Time:Who Really Gets to Retire? 197 The Value of Time and the Link between Paid Work and Health 198 Who Has the Most Retirement Time? 201 The Difference between Survivors and Nonsurvivors 210 Is Retiring Earlier Really the Ticket to Retirement-Time Equity? 212 Equalizing Retirement Time with Disability Insurance 215 Conclusion: Who Really Gets to Retire? 215 Chapter 8: Working: The New Retirement's Effect on the Economy 217 Box 8.1. Age Is in the Eye of the Beholder, the Researcher, the Lawyer, and the Retailer 218 Older Americans Are Working More 219 The Quality of Older Workers Jobs: More Push than Pull Gets the Elderly to Work 223 How 401(k)s Destabilize the Economy 226 Pension Surprises and Work 230 Conclusions and Policy Implications: The New Retirement 233 Contents ix Part III: The Rescue Plan for Retirement Chapter 9: The American Labor Movement: Advocating Retirement and Obtaining Pensions 237 Unions Opt for Employee Benefits 238 Are Pensions Deferred Wages or Payments for Depreciation? 240 What Unions Do: Explaining the Union Pension Advantage 245 Unions and Legacy Costs in Defined Benefit Plans 249 Organized Labor and Social Security 252 Labor's Capital 253 Conclusion: Unions and Pensions 258 Chapter 10: Rescue Plan for American Workers' Retirement: Averting the End of Retirement 260 Guaranteed Retirement Accounts 263 GRA Efficiency, Fairness, and Shared Risk 266 Failure of the Current Tax Policy 275 Are Guaranteed Retirement Accounts Politically Feasible? 280 Box 10.1. A Persistent Policy Recommendation: Raising the Retirement Age 284 Conclusion: The Final Bottom Line 288 Appendix 10.1. Guaranteed Retirement Accounts: Questions and Answers 290 Notes 295 Glossary 331 Bibliography 341 Acknowledgments 365 Index 367

"Passionate...In [Ghilarducci's] plan, the funds would not be managed by Wall Street but sent to Washington, where the federal government would guarantee a minimum return of 3 percent a year...The conception behind Ghilarducci's dramatic proposals makes sense. If Americans cannot, without heavy sacrifice, save enough themselves to ensure adequate retirement, perhaps government, backed with subsidies should, as she suggests, make them save."--Jeff Madrick, New York Review of Books "When I'm Sixty-Four is an excellent book ... and makes a bold and workable proposal."--Clive Crook, Chronicle of Higher Education "Teresa Ghilarducci's When I'm Sixty-Four is quite simply the best thing yet written on the retirement crisis facing baby boomers and the larger fragility of our retirement system. Far from defeatist, she proposes an ingenious national plan that will instantly become the reform against which all others must measure up. In clear prose, Teresa Ghilarducci cuts to the essence of an often bewildering subject that affects every American."--Robert Kuttner, American Prospect "Teresa Ghilarducci isn't one for conventional wisdom. In When I'm Sixty-Four [she] argues that a rich nation ought to be able to ensure a secure old age. And she has a radical proposal for making that happen."--Pat Regnier, Money Magazine "What's the difference between saving for retirement, on the one hand, and plain old saving, on the other? Teresa Ghilarducci, an economist at the New School, has a provocative book ... which forces us to ask that question very seriously."--Felix Salmon, Portfolio.com "What I like about Ghilarducci's proposal is its boldness--the idea that it is better to create a new model than to keep retrofitting a system that presents unacceptable risk to so many workers."--Martha M. Hamilton, Washington Post "This volume provides a welcome curative to the daily news reports on the imminent retirement crisis facing the US because of falling birthrates, lengthening life spans, uncertain national economic performance, deliberate corporate gutting of programs, wage stagnation, and the potential Social Security fund insolvency. Ghilarducci carefully guides the reader through the morass of claims and counterclaims about the prospects for those entering their 'golden years' in the US... Ghiladrucci's timely book addresses an important public policy issue."--D.J. Conger, Choice "The book reads easily and well throughout, and I like the frequent boxes setting out 'Data to Digest' and 'The Bottom Line.' The diagnosis is powerful and hits many nails on the head."--Nicholas Barr, Journal of Economic Literature "This precise moment in history is probably the ideal one to read Teresa Ghilarducci's When I'm Sixty-Four... Its value to labor educators lies in Ghilarducci's thorough examination of the issue and in her extensive supporting documentation."--Judi King, Labor Studies Journal

Teresa Ghilarducci, after having taught economics for twenty-five years at the University of Notre Dame, now holds the Irene and Bernard L. Schwartz Chair of Economic Policy Analysis at the New School for Social Research. She is also the 2006-2008 Wurf Fellow at Harvard Law School. Her books include Labor's Capital: The Economics and Politics of Private Pensions.

• Introduction 1 Part I The Attack on Retirement Chapter 1: Hope for Retirement's Future 7 Principles for a Pension Rescue Plan 8 The Successes of the U.S. Retirement System 10 Three Beliefs That Threaten the Pension System 17 Individual Retirement Accounts: Current Reform Ideas Fall Short of a Vision to Successfully Preserve Retirement 23 Conclusion: Retirement's Future 25 Chapter 2: The Collapse of Retirement Income 26 What People Need in Retirement 26 What People Think They Know: Retirement Income Expectations 28 Predictions of Retirement Readiness 30 The Five Parts of a Retirement Wealth Portfolio: Four Are Failing 32 Distribution of Retirement Income and Distribution of Retirement Readiness 42 Women Face Special Pension Circumstances 44 Pension Futures for Workers with Moderate Incomes 53 Conclusion: Failures of the Current U.S. Retirement Income Security System 56 Chapter 3: When Bad Things Happen to Good Pensions--Promises Get Broken 58 Defined Benefit Pensions and the Road to a Middle-Class Retirement 59 Diminished Defined Benefit Plans 60 The Paradox of Overall Pension Stagnation 66 Workers' Demand for Defined Benefit Pension Plans 72 Why Workers Don't Like Defined Benefit Pension Plans 78 Lump Sums and Defined Benefit Plans: A Cure that Creates the Disease 80 Box 3.1. The Story of Lump Sum Payouts 82 Why Firms Like Defined Benefit Pensions 84 Box 3.2. The Story of the Miners' Union's Pensions: How Secondary Markets Are Transformed 87 Employers Who Do Not Sponsor Defined Benefit Plans Prefer 401(k) Plans--or Nothing 90 Legacy Costs: Defined Benefit Plans Do Not Kill Companies 92 What Should Government Policy Do? 95 Policy Options 96 Conclusion: When Bad Things Happen to Good Pensions 101 Appendix 3.1. The Pension Protection Act of 2006 103 The Pension Protection Act: Destroying the Defined Benefit System as the Way to Save It 108 The Effects of the Pension Protection Act of 2006 112 Conclusion: The Pension Protection Act of 2006 115 Chapter 4: Do-It-Yourself Pensions 116 Trends in 401(k) Plans 117 Advantages and Disadvantages of Defined Contribution Pensions 118 Longevity, Investment, Financial, Inflation, Political, and Poverty Risks 122 Box 4.1. Investment Management Fees: The Politics and Profits 128 Causes of the Shift to 401(k) Plans 130 Box 4.2. Are 401(k) Plans Cheaper Than Defined Benefit Pension Plans? 133 Conclusion: Do-It-Yourself Pensions 136 Chapter 5: The Future of Social Security 139 How Does Social Security Work? 139 Issues in Social Security Financing 143 Box 5.1. Why Did the Greenspan Commission Get It Wrong? 150 The Personal Savings Account Plan 154 Box 5.2. Advance Funding Retirement 156 Motives for and Likely Effects of Personal Savings Accounts 157 Fixes that Maintain Social Security's Basic Structure 164 Political History of the Social Security Program 169 The Debate over Social Security: Some Things Never Change 172 What Is New in the Social Security Debate? 175 Conclusion: The Future of Social Security 178 Part II: What Is Good about America's Retirement Income Security System Chapter 6: The Short History of Old Age Leisure in America 181 Retirement Leisure by Generation 181 Repositioning the Retirement Idea 186 Praising and Promoting Work 188 Can the Elderly Work More? 190 Affordability: Are Pensions a Form of Fiscal Child Abuse? 191 America's Unique Pension Debate 192 Policy Implications of Repositioned Retirement Norms 194 Conclusion: Old Age Leisure in America 195 Chapter 7: The Distribution of Retirement Time:Who Really Gets to Retire? 197 The Value of Time and the Link between Paid Work and Health 198 Who Has the Most Retirement Time? 201 The Difference between Survivors and Nonsurvivors 210 Is Retiring Earlier Really the Ticket to Retirement-Time Equity? 212 Equalizing Retirement Time with Disability Insurance 215 Conclusion: Who Really Gets to Retire? 215 Chapter 8: Working: The New Retirement's Effect on the Economy 217 Box 8.1. Age Is in the Eye of the Beholder, the Researcher, the Lawyer, and the Retailer 218 Older Americans Are Working More 219 The Quality of Older Workers Jobs: More Push than Pull Gets the Elderly to Work 223 How 401(k)s Destabilize the Economy 226 Pension Surprises and Work 230 Conclusions and Policy Implications: The New Retirement 233 Contents ix Part III: The Rescue Plan for Retirement Chapter 9: The American Labor Movement: Advocating Retirement and Obtaining Pensions 237 Unions Opt for Employee Benefits 238 Are Pensions Deferred Wages or Payments for Depreciation? 240 What Unions Do: Explaining the Union Pension Advantage 245 Unions and Legacy Costs in Defined Benefit Plans 249 Organized Labor and Social Security 252 Labor's Capital 253 Conclusion: Unions and Pensions 258 Chapter 10: Rescue Plan for American Workers' Retirement: Averting the End of Retirement 260 Guaranteed Retirement Accounts 263 GRA Efficiency, Fairness, and Shared Risk 266 Failure of the Current Tax Policy 275 Are Guaranteed Retirement Accounts Politically Feasible? 280 Box 10.1. A Persistent Policy Recommendation: Raising the Retirement Age 284 Conclusion: The Final Bottom Line 288 Appendix 10.1. Guaranteed Retirement Accounts: Questions and Answers 290 Notes 295 Glossary 331 Bibliography 341 Acknowledgments 365 Index 367

"Passionate...In [Ghilarducci's] plan, the funds would not be managed by Wall Street but sent to Washington, where the federal government would guarantee a minimum return of 3 percent a year...The conception behind Ghilarducci's dramatic proposals makes sense. If Americans cannot, without heavy sacrifice, save enough themselves to ensure adequate retirement, perhaps government, backed with subsidies should, as she suggests, make them save."--Jeff Madrick, New York Review of Books "When I'm Sixty-Four is an excellent book ... and makes a bold and workable proposal."--Clive Crook, Chronicle of Higher Education "Teresa Ghilarducci's When I'm Sixty-Four is quite simply the best thing yet written on the retirement crisis facing baby boomers and the larger fragility of our retirement system. Far from defeatist, she proposes an ingenious national plan that will instantly become the reform against which all others must measure up. In clear prose, Teresa Ghilarducci cuts to the essence of an often bewildering subject that affects every American."--Robert Kuttner, American Prospect "Teresa Ghilarducci isn't one for conventional wisdom. In When I'm Sixty-Four [she] argues that a rich nation ought to be able to ensure a secure old age. And she has a radical proposal for making that happen."--Pat Regnier, Money Magazine "What's the difference between saving for retirement, on the one hand, and plain old saving, on the other? Teresa Ghilarducci, an economist at the New School, has a provocative book ... which forces us to ask that question very seriously."--Felix Salmon, Portfolio.com "What I like about Ghilarducci's proposal is its boldness--the idea that it is better to create a new model than to keep retrofitting a system that presents unacceptable risk to so many workers."--Martha M. Hamilton, Washington Post "This volume provides a welcome curative to the daily news reports on the imminent retirement crisis facing the US because of falling birthrates, lengthening life spans, uncertain national economic performance, deliberate corporate gutting of programs, wage stagnation, and the potential Social Security fund insolvency. Ghilarducci carefully guides the reader through the morass of claims and counterclaims about the prospects for those entering their 'golden years' in the US... Ghiladrucci's timely book addresses an important public policy issue."--D.J. Conger, Choice "The book reads easily and well throughout, and I like the frequent boxes setting out 'Data to Digest' and 'The Bottom Line.' The diagnosis is powerful and hits many nails on the head."--Nicholas Barr, Journal of Economic Literature "This precise moment in history is probably the ideal one to read Teresa Ghilarducci's When I'm Sixty-Four... Its value to labor educators lies in Ghilarducci's thorough examination of the issue and in her extensive supporting documentation."--Judi King, Labor Studies Journal

Teresa Ghilarducci, after having taught economics for twenty-five years at the University of Notre Dame, now holds the Irene and Bernard L. Schwartz Chair of Economic Policy Analysis at the New School for Social Research. She is also the 2006-2008 Wurf Fellow at Harvard Law School. Her books include Labor's Capital: The Economics and Politics of Private Pensions.

• Introduction 1 Part I The Attack on Retirement Chapter 1: Hope for Retirement's Future 7 Principles for a Pension Rescue Plan 8 The Successes of the U.S. Retirement System 10 Three Beliefs That Threaten the Pension System 17 Individual Retirement Accounts: Current Reform Ideas Fall Short of a Vision to Successfully Preserve Retirement 23 Conclusion: Retirement's Future 25 Chapter 2: The Collapse of Retirement Income 26 What People Need in Retirement 26 What People Think They Know: Retirement Income Expectations 28 Predictions of Retirement Readiness 30 The Five Parts of a Retirement Wealth Portfolio: Four Are Failing 32 Distribution of Retirement Income and Distribution of Retirement Readiness 42 Women Face Special Pension Circumstances 44 Pension Futures for Workers with Moderate Incomes 53 Conclusion: Failures of the Current U.S. Retirement Income Security System 56 Chapter 3: When Bad Things Happen to Good Pensions--Promises Get Broken 58 Defined Benefit Pensions and the Road to a Middle-Class Retirement 59 Diminished Defined Benefit Plans 60 The Paradox of Overall Pension Stagnation 66 Workers' Demand for Defined Benefit Pension Plans 72 Why Workers Don't Like Defined Benefit Pension Plans 78 Lump Sums and Defined Benefit Plans: A Cure that Creates the Disease 80 Box 3.1. The Story of Lump Sum Payouts 82 Why Firms Like Defined Benefit Pensions 84 Box 3.2. The Story of the Miners' Union's Pensions: How Secondary Markets Are Transformed 87 Employers Who Do Not Sponsor Defined Benefit Plans Prefer 401(k) Plans--or Nothing 90 Legacy Costs: Defined Benefit Plans Do Not Kill Companies 92 What Should Government Policy Do? 95 Policy Options 96 Conclusion: When Bad Things Happen to Good Pensions 101 Appendix 3.1. The Pension Protection Act of 2006 103 The Pension Protection Act: Destroying the Defined Benefit System as the Way to Save It 108 The Effects of the Pension Protection Act of 2006 112 Conclusion: The Pension Protection Act of 2006 115 Chapter 4: Do-It-Yourself Pensions 116 Trends in 401(k) Plans 117 Advantages and Disadvantages of Defined Contribution Pensions 118 Longevity, Investment, Financial, Inflation, Political, and Poverty Risks 122 Box 4.1. Investment Management Fees: The Politics and Profits 128 Causes of the Shift to 401(k) Plans 130 Box 4.2. Are 401(k) Plans Cheaper Than Defined Benefit Pension Plans? 133 Conclusion: Do-It-Yourself Pensions 136 Chapter 5: The Future of Social Security 139 How Does Social Security Work? 139 Issues in Social Security Financing 143 Box 5.1. Why Did the Greenspan Commission Get It Wrong? 150 The Personal Savings Account Plan 154 Box 5.2. Advance Funding Retirement 156 Motives for and Likely Effects of Personal Savings Accounts 157 Fixes that Maintain Social Security's Basic Structure 164 Political History of the Social Security Program 169 The Debate over Social Security: Some Things Never Change 172 What Is New in the Social Security Debate? 175 Conclusion: The Future of Social Security 178 Part II: What Is Good about America's Retirement Income Security System Chapter 6: The Short History of Old Age Leisure in America 181 Retirement Leisure by Generation 181 Repositioning the Retirement Idea 186 Praising and Promoting Work 188 Can the Elderly Work More? 190 Affordability: Are Pensions a Form of Fiscal Child Abuse? 191 America's Unique Pension Debate 192 Policy Implications of Repositioned Retirement Norms 194 Conclusion: Old Age Leisure in America 195 Chapter 7: The Distribution of Retirement Time:Who Really Gets to Retire? 197 The Value of Time and the Link between Paid Work and Health 198 Who Has the Most Retirement Time? 201 The Difference between Survivors and Nonsurvivors 210 Is Retiring Earlier Really the Ticket to Retirement-Time Equity? 212 Equalizing Retirement Time with Disability Insurance 215 Conclusion: Who Really Gets to Retire? 215 Chapter 8: Working: The New Retirement's Effect on the Economy 217 Box 8.1. Age Is in the Eye of the Beholder, the Researcher, the Lawyer, and the Retailer 218 Older Americans Are Working More 219 The Quality of Older Workers Jobs: More Push than Pull Gets the Elderly to Work 223 How 401(k)s Destabilize the Economy 226 Pension Surprises and Work 230 Conclusions and Policy Implications: The New Retirement 233 Contents ix Part III: The Rescue Plan for Retirement Chapter 9: The American Labor Movement: Advocating Retirement and Obtaining Pensions 237 Unions Opt for Employee Benefits 238 Are Pensions Deferred Wages or Payments for Depreciation? 240 What Unions Do: Explaining the Union Pension Advantage 245 Unions and Legacy Costs in Defined Benefit Plans 249 Organized Labor and Social Security 252 Labor's Capital 253 Conclusion: Unions and Pensions 258 Chapter 10: Rescue Plan for American Workers' Retirement: Averting the End of Retirement 260 Guaranteed Retirement Accounts 263 GRA Efficiency, Fairness, and Shared Risk 266 Failure of the Current Tax Policy 275 Are Guaranteed Retirement Accounts Politically Feasible? 280 Box 10.1. A Persistent Policy Recommendation: Raising the Retirement Age 284 Conclusion: The Final Bottom Line 288 Appendix 10.1. Guaranteed Retirement Accounts: Questions and Answers 290 Notes 295 Glossary 331 Bibliography 341 Acknowledgments 365 Index 367

"Passionate...In [Ghilarducci's] plan, the funds would not be managed by Wall Street but sent to Washington, where the federal government would guarantee a minimum return of 3 percent a year...The conception behind Ghilarducci's dramatic proposals makes sense. If Americans cannot, without heavy sacrifice, save enough themselves to ensure adequate retirement, perhaps government, backed with subsidies should, as she suggests, make them save."--Jeff Madrick, New York Review of Books "When I'm Sixty-Four is an excellent book ... and makes a bold and workable proposal."--Clive Crook, Chronicle of Higher Education "Teresa Ghilarducci's When I'm Sixty-Four is quite simply the best thing yet written on the retirement crisis facing baby boomers and the larger fragility of our retirement system. Far from defeatist, she proposes an ingenious national plan that will instantly become the reform against which all others must measure up. In clear prose, Teresa Ghilarducci cuts to the essence of an often bewildering subject that affects every American."--Robert Kuttner, American Prospect "Teresa Ghilarducci isn't one for conventional wisdom. In When I'm Sixty-Four [she] argues that a rich nation ought to be able to ensure a secure old age. And she has a radical proposal for making that happen."--Pat Regnier, Money Magazine "What's the difference between saving for retirement, on the one hand, and plain old saving, on the other? Teresa Ghilarducci, an economist at the New School, has a provocative book ... which forces us to ask that question very seriously."--Felix Salmon, Portfolio.com "What I like about Ghilarducci's proposal is its boldness--the idea that it is better to create a new model than to keep retrofitting a system that presents unacceptable risk to so many workers."--Martha M. Hamilton, Washington Post "This volume provides a welcome curative to the daily news reports on the imminent retirement crisis facing the US because of falling birthrates, lengthening life spans, uncertain national economic performance, deliberate corporate gutting of programs, wage stagnation, and the potential Social Security fund insolvency. Ghilarducci carefully guides the reader through the morass of claims and counterclaims about the prospects for those entering their 'golden years' in the US... Ghiladrucci's timely book addresses an important public policy issue."--D.J. Conger, Choice "The book reads easily and well throughout, and I like the frequent boxes setting out 'Data to Digest' and 'The Bottom Line.' The diagnosis is powerful and hits many nails on the head."--Nicholas Barr, Journal of Economic Literature "This precise moment in history is probably the ideal one to read Teresa Ghilarducci's When I'm Sixty-Four... Its value to labor educators lies in Ghilarducci's thorough examination of the issue and in her extensive supporting documentation."--Judi King, Labor Studies Journal