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Falling Short: The Coming Retirement Crisis and What to Do About It
The United States faces a serious retirement challenge. Many of today's workers will lack the resources to retire at traditional ages and maintain their standard of living in retirement. Solving the problem is a major challenge in today's environment in which risk and responsibility have shifted from government and employers to individuals. For this reason, Charles D. Ellis, Alicia H. Munnell, and Andrew D. Eschtruth have written this concise guide for anyone concerned about their own - and the nation's - retirement security.Falling Short is grounded in sound research yet written in a highly accessible style. The authors provide a vivid picture of the retirement crisis in America. They offer the necessary context for understanding the nature and size of the retirement income shortfall, which is caused by both increasing income needs-due to longer lifespans and rising health costs-and decreasing support from Social Security and employer-sponsored pension plans.The solutions are to work longer and save more by building on the existing retirement system. To work longer, individuals should plan to stay in the labor force until age 70 if possible. To save more, policymakers should shore up Social Security's long-term finances; make all 401(k) plans fully automatic, with workers allowed to opt out; and ensure that everyone has access to a retirement savings plan. Individuals should also recognize that their house is a source of saving, which they can tap in retirement through downsizing or a reverse mortgage.
- GenresNonfictionFinance
168 pages, Kindle Edition
First published January 1, 2014
19 people are currently reading
178 people want to read
About the author
Charles D. Ellis
102 books86 followersCharles “Charley” D. Ellis is an American investment consultant. In 1972, Ellis founded Greenwich Associates, an international strategy consulting firm focused on financial institutions. Ellis is known for his philosophy of passive investing through index funds, as detailed in his book Winning the Loser’s Game.
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Displaying 1 - 19 of 19 reviews
December 26, 2018
As someone who works in the retirement industry, I enjoyed this book because it had a lot of ideas I agree with, some good context on social security, and some eye-popping statistics on how unprepared most retirees are. It was a very short (~130 page) read and informative. If you don't know anything about 401ks, you will probably be bored to tears, however.
June 3, 2018
Very much written in the style of "tell them what you're going to tell them, tell them, tell them what you told them", but overall, an easy, well-written, informative read on the state of the US retirement shortfall.
July 30, 2025
Work longer, save more, maximize Social security, use your home equity. Many books can be condensed to a blog post. This one could be condensed to a postcard with room to spare.
February 16, 2019
Inflation, booming population of seniors, longevity (now retirement is often a stage that is 30 years long), a shrinking ratio of younger workers paying into social security, and rising health care costs... are spelling doom for having enough money to retire on.
Solutions are not fun....delay taking social security until you are 70 (then you get the full payout), keep working part-time, decrease your spending, leverage your home by using a reverse mortgage, and do a better job of saving. And if you are one of the few lucky people that has a job with a pension..take advantage.
4 stars. Good information.
Solutions are not fun....delay taking social security until you are 70 (then you get the full payout), keep working part-time, decrease your spending, leverage your home by using a reverse mortgage, and do a better job of saving. And if you are one of the few lucky people that has a job with a pension..take advantage.
4 stars. Good information.
February 23, 2017
85% of people are "passive" savers who pay little attention to tax incentives; they just adjust their spending to their take-home pay, & therefor their savings is very responsive to defaults such as auto enrollments. Only 15% are "active" savers who would be responsive to tax subsidies; but they respond to subsidies by shifting their $ across accounts rather than by altering their total saving.
Those whose can work longer should. Nearly everyone needs to save more.
Those whose can work longer should. Nearly everyone needs to save more.
April 25, 2015
Short, easy to read and understand, to the point. We are looking at retiring with less, working longer and/or saving more. The book describes the history of American retirement, how we arrived at our present situation, and what things we can do personally and nationally to remediate the current pending retirement crisis. Highly recommended for all workers.
December 12, 2018
good advice
July 20, 2020
Looked over and read Introduction. The book is a bit like other financial books I've read and doesn't seem to offer anything new.
February 13, 2022
Good information. Quite redundant. Biggest take always for readers? Work longer. Take social security at age 70. Save a heck of a lot more.
March 23, 2022
Very informative read about how the US retirement situation is structured, and sensible solutions for how to improve its downsides. Wish there were a 2022 update!
March 23, 2017
Kind of repetitive, and it's grim. Basically it comes down to: work longer, save more.
September 3, 2015
I think this is a very good roadmap of what must be done by individuals and society to prepare an aging population for retirement.
1. Work longer. :(
2. Fix Social Security
3. Save more through 401 K's
4. Consider using home equity
page 14: "...the legislation accelerated the payment of benefits so individuals who had worked only a few years under the system were entitled to receive full benefits. This decision shifted the financing model from a funded system to pay-as-you-go, with big implications for the cost of Social Security benefits today. If earlier cohorts had received only the benefits that could have been financed by their contributions plus interest, trust fund assets and interest earnings would be much larger today and the required tax on our current earnings much lower."
page 110-111: "We have ended up with a mostly pay-as-you-go system, because, as noted, we gave away to early cohorts the trust fund that otherwise would have accumulated. Many of the early beneficiaries had fought in World War I and had suffered losses in the Great Depression, so the decision to pay benefits far in excess of contributions to those early retirees may have been justified on public policy grounds. But the cost of that decision was to forgo the buildup of a trust fund whose accumulated interest could have covered a substantial part of today's benefits.
The question is whether current and future workers should be asked to pay the higher payroll tax resulting from the decision to give away the trust fund or whether they should be asked to pay simply what they would have to contribute in a funded system. This issue is important because the payroll tax, with no deductions or exemptions, places a significant burden on low-wage workers. One could argue that the legacy burden should be borne by the general population in proportion to the ability to pay -- that is, this portion of the Social Security financing problem could be transferred to the personal income tax. Of course, transferring to legacy debt to the personal income tax does not eliminate the burden; the average income tax rate would have to increase by about 4.6 percentage points (from about 19.0 percent to 23.6 percent). Such an increase would be extremely difficult in today's political environment. Nevertheless, the legacy debt must be paid one way or another, and the income tax is a more equitable mechanism than the payroll tax."
1. Work longer. :(
2. Fix Social Security
3. Save more through 401 K's
4. Consider using home equity
page 14: "...the legislation accelerated the payment of benefits so individuals who had worked only a few years under the system were entitled to receive full benefits. This decision shifted the financing model from a funded system to pay-as-you-go, with big implications for the cost of Social Security benefits today. If earlier cohorts had received only the benefits that could have been financed by their contributions plus interest, trust fund assets and interest earnings would be much larger today and the required tax on our current earnings much lower."
page 110-111: "We have ended up with a mostly pay-as-you-go system, because, as noted, we gave away to early cohorts the trust fund that otherwise would have accumulated. Many of the early beneficiaries had fought in World War I and had suffered losses in the Great Depression, so the decision to pay benefits far in excess of contributions to those early retirees may have been justified on public policy grounds. But the cost of that decision was to forgo the buildup of a trust fund whose accumulated interest could have covered a substantial part of today's benefits.
The question is whether current and future workers should be asked to pay the higher payroll tax resulting from the decision to give away the trust fund or whether they should be asked to pay simply what they would have to contribute in a funded system. This issue is important because the payroll tax, with no deductions or exemptions, places a significant burden on low-wage workers. One could argue that the legacy burden should be borne by the general population in proportion to the ability to pay -- that is, this portion of the Social Security financing problem could be transferred to the personal income tax. Of course, transferring to legacy debt to the personal income tax does not eliminate the burden; the average income tax rate would have to increase by about 4.6 percentage points (from about 19.0 percent to 23.6 percent). Such an increase would be extremely difficult in today's political environment. Nevertheless, the legacy debt must be paid one way or another, and the income tax is a more equitable mechanism than the payroll tax."
August 8, 2016
What did I take away from this book?
DOOOOOOOOOOOOOOMMM!!!!!!!!!!!!!!!!!!!!!!!
Basically, if you know how to use your 401(k); if you work until you're 70 (because Social Security benefits are reduced if you start claiming before 70); and if you're willing to sell/(reverse) mortgage your house? Then you MIGHT manage to save enough by the time you retire.
I don't have a 401(k), and I don't expect to have access to one any time soon. I don't have a house. I don't expect to ever buy a house. Unless I marry a rich man. (HA!) I kind of expect Social Security to collapse before I make it to 70. So I'm doomed. But I'm going to scrimp and save so that maybe I can put off living in the cardboard box for a year or two.
But, yea. DOOOOOOOOOOOOOMMMMMMMM!!!!!!!!!!!!!!!!!
DOOOOOOOOOOOOOOMMM!!!!!!!!!!!!!!!!!!!!!!!
Basically, if you know how to use your 401(k); if you work until you're 70 (because Social Security benefits are reduced if you start claiming before 70); and if you're willing to sell/(reverse) mortgage your house? Then you MIGHT manage to save enough by the time you retire.
I don't have a 401(k), and I don't expect to have access to one any time soon. I don't have a house. I don't expect to ever buy a house. Unless I marry a rich man. (HA!) I kind of expect Social Security to collapse before I make it to 70. So I'm doomed. But I'm going to scrimp and save so that maybe I can put off living in the cardboard box for a year or two.
But, yea. DOOOOOOOOOOOOOMMMMMMMM!!!!!!!!!!!!!!!!!
March 1, 2016
Very good book to read about the pending retirement crisis and content is likely to wake up the current workforce and get us all to start to save more, spend less and plan better. I like the easily digestible information here and will be revisiting the content frequently to check my own progress. It doesn't seem to have a political bent, which is refreshing and just is motivational in terms of personal responsibility, less reliance on federal government. Retirement doesn't have to be a foreboding time in our lives if we prepare properly. This book can help you do that.
January 10, 2015
The authors do a nice job of identifying the problems with Social Security and 401(k) plans; and importantly, offer suggestions for improvements. Also, they discuss developing a withdrawal plan. Too often the conversation on retirement planning focuses on accumulation and not enough on developing and executing an effective withdrawal plan.
October 5, 2015
An excellent book that addresses improvements needed in both individual and government planning for retirement.Probably more interesting to me since I am rapidly approaching retirement. Would be more useful to individuals whose retirement is more distant.
October 23, 2015
Read the book in two sittings and enjoyed the history lesson of "how we got here" in the rise and fall of pensions and the originations of the social security program. The historical data was interesting as well. My only grief is the book seemed to be redundant the last few chapters.
August 29, 2015
Interesting ideas on what we as individuals and the government can do to about the savings and social security shortcomings.
December 17, 2016
Great information
Loved this book. Has the figures yet it is not so deep in the woods you loose interest. Great book
Loved this book. Has the figures yet it is not so deep in the woods you loose interest. Great book
Displaying 1 - 19 of 19 reviews