The United States is not necessarily experiencing a retirement crisis – but legislators, employers and advisors can do a number of things to help shore up the country’s retirement system.

In “Agreeing to Disagree on How to Build a Better Retirement,” three panelists debated the potential crisis and retirement proposals – many of which are already on the table in Congress, state legislatures and executive agencies – at the 2019 Morningstar Investment Conference on Thursday in Chicago.

Stephen Wendel, Morningstar’s head of behavioral science, said we’ve created a crisis of expectations.

“As a society we’ve decided that older Americans should have a retirement and live comfortably without a significant income drop, but that’s not going to happen for a significant portion of the population,” said Wendel. “Either we need to follow through on our commitments as a society, or we need to change those expectations.”

An informal live poll of the advisors attending the session found that 89 percent believed there was a retirement crisis, versus 11 percent who did not.

But David Blanchett, Morningstar head of retirement research, framed the problem differently – America has a savings crisis, not a retirement crisis, he said.

“If you look at retirees, they’re a very happy bunch,” said Blanchett. “95 percent describe themselves as happy. Half think that there’s a retirement crisis, but no one really describes their own situation as a crisis.”

While it’s true that most Americans will experience a shortfall in retirement because they’re not saving enough, people usually find ways to make things work, said Blanchett.

Wendel retorted that the question of a retirement crisis shouldn’t be around whether people can adapt, it should be around whether they are required to adapt so that they don’t outlive their assets.

Daniel Bruns, Morningstar vice president of product strategy, said that an effective social safety net has helped stave off a more serious retirement problem, but demographic changes have strained those.

“Life expectancies have increased; we’ve gone from people living from five to 10 years in retirement to now where people expect to live 25, 30, 35 years in retirement,” said Bruns. “They’re working for as long as they’re going to be retired. You can’t save 3, 4, or 5 percent each year and expect to live for 35 years on that.”

Bruns said that people will likely have longer careers, or work multiple careers, to address the longevity issue.

But Wendel pointed out that many Americans are retiring earlier than they expected.

“People are retiring earlier than they had planned; we believe it is because they are not healthy enough,” said Wendel. “People like those in this room, who are relatively well off compared to the average, could keep working. For the vast majority, that’s not true.”

The panelists – and attendees – were then asked about the efficacy of auto-enrollment in defined contribution plans as a tool to combat the retirement shortfall. While attendees were positive about the impact of autoenrollent, the panelists were split.

According to Blanchett, the plan participation rate has increased from 75 percent to 95 percent, but the savings rate in retirement plans has been very slow to increase.

“My concern is where we need to be is not where we are today,” sayid Blanchett. “To have an impact, the savings rate needs to go from 6 percent to 12 percent – which could happen at some point, but hasn’t happened yet.”

Blanchett said that some retirement experts have floated a proposal to have periodic auto-enrollment for plan participants – where at regular intervals, all participants would be auto-enrolled at an escalating contribution to a default alternative investment unless tey opt out.

“A 3 percent default contribution, even with a 1 to 2 percent escalation, doesn’t get you there,” said Blanchett. “Defaults can have a meaningful impact, but those having problems around saving haven’t gotten the impact that they need.”

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