Slate Money – Money Talks: What Retirement Crisis?

Date: February 3, 2026
Host: Emily Peck (Writer at Axios, Co-host of Slate Money)
Guest: Andrew Biggs (Economist at the American Enterprise Institute; Former Deputy Commissioner, Social Security Administration; Author of "The Real Retirement: Why Almost Everything You Know About the US Retirement System is Wrong")

Episode Overview

This episode tackles the often-cited “retirement crisis” in America, challenging the commonly held belief that most Americans are woefully unprepared for retirement. Emily Peck interviews economist Andrew Biggs, who argues that the true retirement problem isn’t under-saving among households, but rather the looming funding shortfall in government programs like Social Security. Biggs provides historic context, dispels myths about 401(k)s versus pensions, and discusses policy comparisons with systems abroad. The discussion closes with practical advice for listeners and an optimistic message.

Key Discussion Points and Insights

The Retirement Crisis Myth (02:14–05:58)

• Incentives Behind Doom-and-Gloom Narratives:
  Andrew Biggs explains that no group has an incentive to highlight positive aspects of the retirement system—financial firms want to sell products, media wants clicks with alarming stories, and policymakers push preferred agendas.

  "Nobody really has the incentive to tell you the more encouraging facts...there's really nobody has the incentive to tell you a different story than what you commonly hear." (Andrew Biggs, 00:51)

• 401(k) vs. Pension Realities:
  The narrative that 401(k)s are inferior to traditional pensions ignores two facts:
  • Pensions were never as widely available as people assume.
  • Far more people have access to and participate in 401(k)s today than ever had defined-benefit pensions.
    In 1975, only 40% of private sector workers were offered pensions and most never vested; today, about 72–73% are offered a retirement plan, 55% participate, and both employers and employees contribute, leading to dramatically higher retirement savings.

  "Retirement savings are far higher today than they were back in this golden age of pensions... it just tells you a very different story." (Andrew Biggs, 05:55)

Historical Comparison and Context (05:58–10:35)

• Poverty Among Retirees Then vs. Now:
  In the 1970s and 1980s, retirees were more likely to be poor. Only ~25% of new retirees had any private pension. Today, retirees are "a disproportionately rich part of the population," with retirement incomes at record highs across income levels.

  "Today retirees are a disproportionately rich part of the population, not just in wealth, but in income... retirees’ incomes today are at record highs. They've never been higher." (Andrew Biggs, 07:15)

• Longer Life Expectancy and Later Retirement:
  Concerns over longevity are somewhat overstated because increases in life expectancy are concentrated among higher earners. Overall, contributions to retirement savings have increased faster than longevity, and Americans are retiring about two years later than in the 1990s.

Are Rising Costs Threatening Retirement? (10:35–12:07)

• Healthcare and Housing Expenses:
  Despite higher costs, retirees spend roughly the same percentage of income on healthcare now (11%) as in 1984, because incomes have grown in step. Dire warnings about catastrophic costs (like nursing homes) ignore the data.

  "It's very easy to paint a dire pict[ure]... but a lot of times the discussion of retirement... has just enough data to be dangerous, but not enough data to be accurate." (Andrew Biggs, 11:35)

The “Real” Retirement Crisis: Social Security Funding (12:07–20:54)

• Social Security’s Looming Shortfall:
  The real threat is the underfunding of government plans. Social Security’s trust fund will be depleted around 2032, requiring ~23% benefit cuts without changes—a gap of $26 trillion over 75 years.

  "Social Security is underfunded by something like $26 trillion...That is where the real crisis is now." (Andrew Biggs, 13:02)

• Political Obstacles:
  Unlike other nations, the U.S. political system makes reforms extremely difficult, even if financial solutions are relatively straightforward (e.g., tax increases or benefit adjustments).

• Benefit Entitlement Myths:
  Americans’ belief they've “earned” benefits is widespread but mathematically unsustainable. Future retirees are projected to get about a third more in benefits than they paid in, making the system unsustainable without change.

  "The most unhelpful myth about Social Security is the idea that we've all earned our benefits...you're simply promising people far more in benefits than they paid into the program." (Andrew Biggs, 18:28)

Trump Accounts and New Policy Directions (20:54–26:19)

• Overview of ‘Trump accounts’:
  New federal savings accounts seeded with $1,000 for babies born 2025–2028—framed as a tool for compound interest and long-term investment. Some speculate they could become a privatized Social Security backdoor.

• Andrew’s View:
  He supports broadening ownership and investment but contends low-income Americans generally do not need more retirement savings (as measured by poverty rates post-retirement). He predicts these accounts will likely be used for things like home purchases or education rather than for retirement supplementation.

  "If these people were not saving enough, poverty would go up. In fact, poverty is going down. So the idea they need to save more is just weak." (Andrew Biggs, 23:43)

International Comparisons – The Australian Model (30:51–40:11)

• How Australia Handles Retirement:
  Australia mandates employer retirement contributions (12% of wages–“superannuation”) for all workers, plus a means-tested government “age pension.” This ensures robust basic coverage with increasing reliance on private savings as the system matures.
  The anti-poverty safety net is stronger and more targeted, while the system flexibly allows higher earners to save more.

  "If we were inventing Social Security from scratch today, we would almost certainly do something like this." (Andrew Biggs, 35:10)

• Potential for the U.S.:
  The transition would require massive employer participation and a different split in public/private responsibility, but would be more rational and equitable.

Personal Advice for Listeners (40:11–48:05)

• Saving Too Much?
  Many Americans, especially those with above-average incomes, are over-saving for retirement, leading to unnecessarily reduced standards of living while working.

  "You end up with more money than you really need. And then you start thinking, how do I avoid taxes on this thing?" (Andrew Biggs, 40:33)

• If You’re Behind:

  • Modestly increase paycheck contribution to retirement accounts (by 2–3%) to cushion possible Social Security changes.
  • Work an extra 1–2 years if possible: This means higher Social Security benefits, more savings, and fewer years needing income from retirement savings.
  • Data shows more Americans are working until later ages, countering the belief that “most people can’t.”

• Don’t Max Out Your 401(k) Unless You Truly Can:
  For most, especially those with median incomes or under, maxing out contributions is excessive and can reduce present-life quality needlessly.

  "Nobody making $68,000 needs to save $23,500 for retirement every year. If you did that, your retirement income will be so far above your standard of living when you’re working, it just—to makes no sense." (Andrew Biggs, 45:38)

  • Young and/or low-income workers are better off prioritizing present needs and ramping up saving later; economic models and real-life data both support this pattern.

Wrapping Up: Don’t Panic! (49:28–52:00)

• Retirement prospects are much better than the headlines suggest.
• Most Americans fear they won't have enough, but 80% of actual retirees say they are comfortable.
• The “crisis” headlines are, for the most part, part of a product marketing cycle.

  "Just understand that there’s a tendency to err on the side of... what they would see as caution. I would just see as pessimism.... headlines [say] ‘retirement crisis, this and that’... but they’re really not supported by the data." (Andrew Biggs, 51:22)

Notable Quotes & Memorable Moments

• On the retirement “crisis” narrative:

  "There's always something. You pull at the string and the whole thing falls apart." (Andrew Biggs, 52:00)

• On advice for anxious savers:

  "Don’t panic. You might have to adjust things a little bit. But if I’m correct, most people will not." (Andrew Biggs, 49:38)

• On policy drift and political inertia:

  "It’s very hard to do things here...members of Congress would rather attack each other or just kick the can down the road than actually try to solve these problems." (Andrew Biggs, 16:51)

• On Australia's public/private system:

  "You're having the retirement savings done by the part of society that is good at saving for retirement, ... Governments are terrible at saving for retirement." (Andrew Biggs, 33:13)

Important Timestamps

• 02:14 – Emily’s initial question about the “retirement crisis” and how 401(k)s compare to pensions
• 05:58 – Data on who truly had pensions in the past and why retirees are wealthier today
• 08:52 – Discussion of longevity, savings levels, and how most retirees are doing better than ever
• 12:22 – Social Security’s projected funding cut (23%) and the scale of the problem
• 18:28 – Deep dive into the “you earned your benefits” myth and implications for reform
• 20:54 – The introduction of “Trump accounts” and speculation on privatization
• 30:51 – Exploration of Australia’s retirement system and what the U.S. can learn
• 40:11 – Personal finance advice: oversaving, optimal habits, and Social Security delay
• 49:28 – Andrew’s final message: “Don’t panic!”

Recap & Takeaways

• The so-called retirement crisis is largely manufactured by special interests and by misunderstanding historic and current data.
• The real challenge is political: fixing the underfunding in government programs, especially Social Security.
• Private sector savings, via 401(k)s and IRAs, have never been higher—and far more people are saving than during the “golden age” of pensions.
• Models like Australia’s, which split anti-poverty initiatives from contributory and private savings, may offer a sensible path forward.
• Ordinary savers are often needlessly anxious—a product of scaremongering and marketing. Most people, if rational and flexible, will be fine.

For further details on Andrew Biggs' arguments and personal finance advice, see his book “The Real Retirement: Why Almost Everything You Know About the US Retirement System is Wrong.”