A change in the retirement system is greatly needed, because the current system

disproportionately benefits those with high incomes, according to a new report from the Schwartz Center for Economic Policy Analysis (SCEPA). The report calls for a universal retirement plan that would reduce inequality and prevent downward mobility. Unfortunately, researchers say, SECURE 2.0 "will not address the fundamental inadequacies imbedded in it."

As the report's co-authors Siavash Radpour, Eva Conway, and Teresa Ghilarducci write: "The retirement crisis is a real and growing threat. Social Security, retirement savings, and other private retirement assets represent the largest components of household wealth and are among the most unequally distributed forms of wealth among households in the bottom 90% of wealth distribution. Social Security plays a major role in reducing inequality in retirement wealth and wealth in general. However, wealth inequality, driven by a lack of private savings, leaves many retirees unable to maintain their pre-retirement income, putting them at risk of a sharp decline in their living standards as they age."

Serious legislative proposals to address the retirement crisis should aim to fix the massive inefficiencies, inequities, and inadequacies of the current retirement system, the authors claim.

A 26% reduction in elder poverty by 2045?

Among the report highlights:

• Due to the "systemic flaws" of the U.S. retirement system, between 2019 and 2045, the number of poor or near-poor people over the age of 62 will increase by 22.3% — from 18 million to 21.3 million.
• Universal access to retirement savings may be one of the best complements for a re-enforced Social Security to supplement retirement income and ease the retirement crisis.
• Even under conservative assumptions, universal access could reduce elder poverty by 26% by 2045 if all workers had access to a workplace retirement plan in 2019.

"We pinpoint the lack of workplace retirement plan coverage as the main cause of inadequate and massively unequal retirement wealth," said Radpour, associate research director of SCEPA, which is a policy research center housed within The New School's economics department. "Universal retirement accounts and providing workers with more equitable and better targeted tax incentives are among the best methods to supplement Social Security, address inequality, and prevent downward mobility in retirement."

The SCEPA report also makes the following policy recommendations:

• Establish a universal retirement plan, similar to Guaranteed Retirement Accounts
• Make retirement tax expenditures more equitable, which the authors argue also would make them more effective and efficient.
• Protect retirement savings from the urgency of short-term spending needs, especially among individuals with incomes who are more likely to need access to cash.
• Strengthen and expand Social Security, which the authors call "the bedrock of the American retirement system." They add that "Social Security retirement and disability insurance ensure that workers will have a secure stream of income that keeps them out of poverty, no matter what happens to them."