Vincent building one of the largest Cloud Data Centers secure mountain facility in utah. It is doing so because its surveillance needs require that degree of storage. And security. The u. S. Chief Information Officer three or four years ago ordered u. S. Government agencies to move to the cloud and even civilian agencies are turning to cloud services. Monday night at 8 00 eastern on the communicators on cspan2. Next, a discussion about the aging population and how the current job market and longer life expense the arts betting how people live and save for retirement. From the new American Foundation in new york city, this is just over an hour. This is a big topic and there are so many aspects to it. We are in a bit of a new age here for baby boomers. It has been called the end retirement, a phrase teresa has used. We have been talking about this topic here talk about you think about that. Talking about retirement that is voluntary that promises a secure income for the rest of your life, that is pretty much gone for most people. Lets take off the top percent. That is fine. Little bit worried about living too long, but they are ok. The real problem is the bottom 90 . There is not a problem of longterm Care Insurance or finding work if you lost your job. A lot of people are retired earlier than they thought they would be. Youre not alone. Most people who are retired say i left work earlier than i wanted to. Most of the socalled retirement withdraw from the labor market with no choice, either because of health, or because they are laid off. Then they reenter the labor market at very different jobs than they had before. We have an issue where policymakers on the Bipartisan Policy Commission are talking about raising the retirement age. Economist and i think that is a good idea for Social Security. However, the narrative is that people could just continue working for a year or two or more. He does things wrong with that is that most people do not have the choice. Just work in their career jobs. They do have a choice to go back to work and they enter the labor market the teenagers are entering retail, other lowwage jobs. The other problem is that we are finding in our center race and income level and by sex in some cases there are i think every working woman understands this. The same mortality as workingmen. The idea that women live a lot longer because of genetics is probably not true. There is some thing just something about work life. We make people work longer. Some people will be able to have some kind of retirement for the rest of their lives. Other people will have to work until they drop dead and that is what im concerned about. That is the dark side. I want to ask chip and marcy if you want to join in here as well. There is another side to this as well. Boomers are a very resilient group. They have changed every age they have been through. What is your seeing or thinking on that . Chip i think that is true. As someone less followed them throughout my life, i hope they solve this problem so that when my generation get there, we will all be good. But every stage in life, they have completely remade the idea of what it meant to go through that life. I agree with a lot of what was said. I think it does not really just apply to people on the edge of retirement. I think it applies to millennials as well, who are finding the job market to be a lot more difficult. If we look at what is happening they are important trends so pervasive there almost tied to nature. We have this graphic becoming more skewed, People Living longer, and ultimate older segment as well. That is one trend. The other trend is the rapidly increasing ability of technology. Technology itself is competing for jobs. Those two does things together i think of putting incredible pressures on all of our institutions. The way that we behave as individuals, commercial institutions we have an i work for an asset manager. Were thinking about, how can we serve our clients in this changing environment, but also the institutions we have around what a retirement should look like, it was nice and whoever got to enjoy it, that is great but lets face the reality of todays situation. Those are things we think will be, if there is going to be a crisis, i hesitate to use that word because it brings so much drama to it, put all of those need to change. Coming back to the point of your question for optimism here, the boomers are great at remaking institutions and what they have done historically, i am hopeful in polling for them. There is another narrative going on. Consumers might have the potential for what they did in their 60s and not just what they did in the 1950s. Hundreds of individuals who have been using the later part of their working lives to solve social problems. Some of them come the financial kinds of problems were talking about here. I do have many examples here in new york. Sometimes, their everyday people and sometimes careers, david campbell. The volunteers, he put all of his Life Experience into those projects. He calls himself a member of the good for nothing club. He says we do good for nothing. A domestic worker, an immigrant in new york city who had worked as a nanny and a caregiver. She became an advocate and works at the domestic alliance, got a job with benefits in her and get her 60s. Some with paid jobs, some with organizations. There is a big question of what that is like. Need to work and a desire to work. On the need to work and the desire to work . Click yes. Yes. I want to reflect on things. For me, one of the issues [indiscernible] this organization. It would be hard to do that. Personal story might help. Maybe a personal story will help. I think about my mother. Her mother has to take care of my grandmother. My mother wanted to go back to work she was already in her early 60s. Social security benefits early. She has found meaningful activities she can be engaged, but the reality is, that is fine, Social Security is fine as long as everything goes well. When the car breaks down, she does not earn enough to be able to buy to make major repairs. She is ok because she has kids who can help her out. But i do not think she thought so she thought, when i hit retirement, she will be doing stuff, financial financially independent. Worried about the people where they might have enough to get by, but when some kind of crisis concerns those are the kaiser people i think about. Particularly among the boomers, the first generation suddenly told midstream. It is for you to put together. It is not that great. Perhaps some of you want to talk about that. Can we probably have those numbers on hand so i will start. We look at what people have now a different age groups, my team at the new school, and we project out what their income will look like. About six other groups at universities and centers do it appeared our numbers conform with most of theirs. When we look at what people have, people 50 and over on average have a little over 100 thousand dollars. It is a huge variation and motion most people have nothing in their retirement accounts. We are just looking at near retirees look at what theyre going to have, and low to middleclass people, they will be downward the mobile. About 17 per day. The only way i can get my students and journalists and myself to understand what that really means. It is the First Time SinceSocial Security was started for graham present terms of in sums income security. The same time, many of them but not all, many of them will live a lot longer p 15 have a chance of making it past 90. That things happen when you get old. You are at risk of bad things happening when you get old. We are looking at what that might mean for state and local budget. They are the first entitys online to provide food and housing. We look at what this might need for aggregate demand in the community when the income income the biggest growing group and what it might mean for the quality. I am seeing most people really do care about doing meaningful activities when they retire. All of our friends have the choice to change the content of their day. They are going to be looking for what works to get income. It turns out that low income seniors often dont have Adult Children or anything in their savings account. The people who have children usually are better off. We are in a crisis. We dont have the social structure. We dont have the caring labor. When you use the word crisis i think the crisis applies more to institutions than people. I do think we will see the institutional change we need to. Lets start with an institution that has been around 30 years. If you look at what really happened its about 35 years old, started in 1980. You have the boomers grew up when we were slowly moving to a system where they were funding all of the risks. Those are risks that present themselves in old age around retirement. What do we mean about retirement. Youre not able to sell your Human Capital in the marketplace anymore because you choose not to or you cant. And so the boomers my impression of what happened was that over 30 years we made the changes to make it the third leg of the retirement replacing traditional style engines. That caught boomers by surprise. I did not know that this is what i was going to live off of in retirement. Talking about why you can be optimistic about institutional reform. If you are a 25yearold, you are automatically enrolled in a 401 k plan. You are automatically put in a fun thats going to take a fair amount of investment risked when youre young, then become more conservative as you get older. You will earn real money as opposed to giving up with inflation. Your employer has the option of increasing your contribution rate over time. My point is that we have seen institutional reform in an important part of the marketplace. If you are a 25yearold and you are in a welldesigned plan, you have a good chance of having that be there for you when you are ready to retire. Now what we need to work on it does not cover people who dont have a job, people who have parttime jobs, so there is room for a lot more reform and improvement in the system, but we have seen instances where there is that institutional reform. The last thing i will say is that again, i want to come back to the point. We are focusing on the boomers and the people in retirement. It is putting incredible stress on the system and the millennials. It is across the whole demographic. If we dont think about it in that way, we are missing we will make mistakes and how we reformed institutions. The biggest mistake we could make is asking the millennials to take on too much of the responsibility of who we are asking to pay for the institutional reforms. We dont want intergenerational resentment. That will lead to bad things. It is not just a boomer problem, it is a societal problem. [inaudible] a lot of this starter jobs are do you want to comment . One of the thing i want to say is i am worried that the find contributions are not just an issue where the boomers got caught off guard. We have been looking at defined Contribution Plans and how the fact that they allow people to access the sons the funds prior to retirement. During the great recession, did people when faced with financial pressure start tapping into those moneys . It depends on how you measure it. We got upwards of 50 tapping in in some way. I feel like the train has left the station. If that is what we are going to have, we have to help people think about, are you sure you want to tap into that during a recession . Its not just the baby boomers who got caught off guard. Even for those of us who have employee provided clans, we have things to think about as well. Not being able to pay your rent, utility bills and how that is associated with drawing down on your retirement. Mostly its mostly lower wage workers . Know its middleclass workers who are tapping into their plans. The lower workers dont have anything. I want you to sharply focus on how different the 401 k system is a predatory system. The fees are sky high people dont know what it is. The protection of the money is not protected in an ira. It is being used not blackrock other Financial Institutions because youre still in the institutional space the 401 k is inherently a flawed system. It is voluntary, commercially run all the money has to be fully liquid, even though it is for longterm savings. They can only match shortterm liquid accounts. We are the only country with taxdeferred retirement money that we allow withdraw before retirement. Other country set that we are giving you a tax break, you can use it before retirement. Hardships are something that happened onceinalifetime, wheres people with for one of case, it happens every couple of years. Its a savings plan, not a Retirement Plan. One of the reasons we have a crisis is because of the experiment with the 401 k system has failed. We need a mandatory system on top of Social Security managed by institutional investors. I wish all 25yearolds would enter a retirement account. Most companies do not have a Retirement Plan. It is over 50 and it is falling. Small employers, mediumsized employers, and even some big employers are not providing Retirement Plans. So, stop the 140 billion incentives to try to get people in it. Stop the predatory fees. Protect all retirement money that is in iras. Expand Social Security, not reduce it. There has been a Movement Towards a low fees and targeted index funds to there is more awareness. And targeted index funds. There is more awareness. Look, the joke i typically use is that you look at aca Affordable Care act. What does 401 k even mean . We never intended this to be the plan it is today. If we would have, we would have given it another name. We have tried to make it good. And talking about regulatory reforms, we made the biggest improvement to the 401 k system that we have made since its inception about eight years ago. I think is reforms have shown promise. To the point, its not a Retirement Plan. What is a real Retirement Plan do question mark Retirement Plans allow u. S. An individual to take away the uncertainty about when youre going to die, right . It says im going to get a paycheck for life. How many people in this room know when they are going to die . None of us. If you do know, dont raise your hand. Nobody really knows. What we should do is that we should put our money together and we are all going to pay out and average out our life expectancies, and that unfortunate people who die earlier are going to subsidize and i hope for those whom that happens to, that that is not your last thought. Then the people who live longer get to receive money from the people who died earlier than expected. That is the only way that we have been a for we have been able to figure that out. That makes such a difference in the efficiency of your money. If youre going to go out and selfinsure your retirement risks if youre 65, youre expected to live to 85. That is average mortality. You are on average there, but we should prepare beyond average. Not everybody is going to be above average, so you are saving more money and spending less. Your money is going less further than it could be. If youre in one of these mortality structures, which is Social Security, by the way. It is how old defined benefit plans work. Your system when about one third farther. When we talk about a savings crisis, i feel bad because i know people are saying, what do you want me to do . Im saving as much as i can. If we can figure out how to make that money go farther in retirement, that would be a relief on the pressure of trying to save more. Thats what those plans did. The biggest problem today would be i want to be clear, there are some badly designed plans that have bad fees, too expensive. I want to be clear about that. We are big believers in transparency and fees, that you can solve these problems with lowcost index funds. Having said that, your money goes about one third further through the use of a well constructed mortality pool. It has been impossible to get that in a 401 k system. There are some things that would be a great way to be an investment vehicle. That mortality pulls could invest in. Pools could invest in. The only weight to the only way to get access to that is through insurance companies. Insurance companies have their own issues and addressing the market. That could really make a big difference in solving this problem. Thank you. Lets move a little bit to the savings crisis, a lot of people dont have money. People are working longer trying to live longer, trying to hang in there, and there is a huge variety. Does anyone want to talk to that issue . Job market, how people are perceived when they are older. You want to pick that up . Its your turn. We focus on not just people who are working longer, but the social impact as well. We are not looking at the whole market. I am looking at an example of working longer. When the people ive profiled is here in a book i wrote recently. He is sitting right there with the glasses on his head, retired , a new york city parole officers, and has been working for 30 more years since. Is now in his early 80s. He let me say that because he trusts me and he still looking for a new job as we speak. Early in his career, he got a degree in social work at nyu and he went and had a long distinguished career and law enforcement. When he retired, he did a bunch of things that are common for people who want to continue to work and know that they have to support themselves for another 30 years. Yes, he had attention. But he needed extra money. He is a caregiver, another issue that comes up for people. I feel like he personifies what we are talking about. He was motivated by doing something that mattered at each step of the way. He started an organization that places people who are over 55 in nonprofits and government agencies. There are people who still need to make money, want to contribute, and want that purpose. He ended up doing the kind of work that human beings are needed to do. He went back to his social work roots and spent a lot of time at a hospital working in a group. Health care is one of the growing fields that we do see. I feel like that his trajectory is so much about what we are talking about. He is not able to take a break. This provides meaning and a financial s