Meanwhile, 401( k ) accounts are generally complicated and burdensome to navigate. Many eligible workers refuse to enroll due to procrastination or fear of the vast industry of financial swindlers spawned by these credits whose business model is tricking people into high-fee plans.12

Finally, there is evidence that large swathes of the population simply cannot afford to save more than they currently are. Early withdrawals from 401( k ) accounts mean steep tax penalties, but many have done it anyway, especially when times are hard. A Federal Reserve study found that at the bottom of the Great Recession in 2010, early withdrawals from people under 55 were nearly half the size of contributions.13

Taken together, America’s retirement institutions are failing U.S. seniors. A huge fraction of the over-65 population simply cannot afford to retire—employment rates among this population have increased sharply recently, rising from 12.8 percent in 2000 to 18.6 percent in 2016.14 Bankruptcies are also skyrocketing among this cohort, more than doubling between 1991 and 2018.15