JUANA SUMMERS, HOST:
A record number of Americans are retiring, and Social Security's cash surplus is expected to run out in less than a decade. Our colleagues at The Indicator From Planet Money, Wailin Wong and Darian Woods, bring us some ideas to tackle new retirement challenges.
WAILIN WONG, BYLINE: James Chappel is a historian at Duke University. He says that Social Security created old age in the U.S.
JAMES CHAPPEL: So people have always had concepts of old age. What has not been around is the idea we have that your life has divided basically into three parts, which is - one is called youth. One is called middle age, and one is called old age. You cannot find that, really, before the Social Security era.
WONG: James says in the early 1900s, there was not yet this idea of retirement or exiting the labor force with a pension.
DARIAN WOODS, BYLINE: Then came the Great Depression and the realization that older Americans were living in poverty. In addition, working-class families couldn't afford to take care of their parents.
CHAPPEL: When Roosevelt comes into office and is trying to think about the New Deal, old age pensions is one of the things at the top of his agenda. But there are lots of ways to do it. So there was kind of a chaos of ideas on the table.
WOODS: There was a group called the Fraternal Order of Eagles. This was an all-male, whites-only organization, and it wanted pensions for older men who were impoverished because they couldn't work in factories anymore.
CHAPPEL: That's the vision that wins out with Social Security, and someone from the Fraternal Order of Eagles is there with Roosevelt when it's signed.
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FRANKLIN ROOSEVELT: This Social Security measure gives at least some protection to 30 millions of our citizens.
WONG: It was a massive federal investment in older Americans. And that brings us to the important question of, who counts as old? The architects of Social Security settled on the age of 65.
WOODS: Sixty-five was calculated to be the age that would provide for a self-sustaining system without imposing heavy payroll taxes.
WONG: In 1983, the retirement age was raised to 67. And now, given the crisis looming for Social Security, some Republican lawmakers have proposed raising it more, potentially closer to 70.
WOODS: But either way, older Americans are already financially vulnerable. Karen Andres leads the Inclusive Saving and Investment Initiative at the Aspen Institute. She says not only are people living for longer after retirement, but they're also carrying more debt into older adulthood. They have student loans and mortgages.
KAREN ANDRES: We are left in a situation where people are facing many more years of life without labor income at the same time that the systems really aren't working to meet that challenge.
WOODS: Karen says one way to address this gap is creating new kinds of emergency savings accounts at work.
WONG: Workers can withdraw from these types of accounts if they're hit with an emergency. It's an alternative to tapping into their 401(k) accounts early, which could carry penalties. And then for older workers who are eligible to claim Social Security, they can put off doing that, which means a bigger payout later.
ANDRES: Should the role of retirement savings in that pre-retirement or early retirement period be about helping people delay claiming as long as possible?
WONG: Karen points out that designing systems to make older Americans less financially precarious isn't just a necessity of this peak 65 period we're living in. The millennial generation that's coming up behind the baby boomers, it's an even bigger group. So it's about shoring up their future financial security, too.
WOODS: Darian Woods.
WONG: Wailin Wong, NPR News.
(SOUNDBITE OF JAY-Z SONG, "COMING OF AGE (FEAT. MEMPHIS BLEEK)") Transcript provided by NPR, Copyright NPR.
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