Even with all of the strides the retirement industry has made over the past few years with better communications and automatic features in 401(k) plans, people are still not saving enough for retirement.

Only 32% of U.S. workers believe they are on track for retirement compared to 26% of workers globally, according to A Retirement Wake-Up Call: The Aegon Retirement Readiness Survey 2016 by Transamerica Center for Retirement Studies and the Aegon Center for Longevity and Retirement.

“The reality is that retirement readiness is a global issue,” says Catherine Collinson, president of Transamerica Center for Retirement Studies and executive director for the Aegon Center for Longevity and Retirement. “It is happening in countries all over the world, including the U.S.”

Employers are very aware of the issue but “too little action is being taken in solving it,” she says. “As each day passes, populations are growing older due to increases in longevity and lower birth rates. There are fewer working-age people to support increasing percentages of older people.”

Traditional defined benefit pensions are a thing of the past, while Social Security is expected to run out of funds by 2033, according to the latest trust fund report. People aren’t saving enough in their 401(k) plans or IRAs so many workers plan to work longer to help their situation, says Collinson.

But workers may not be able to continue working as long as they think they’ll be able to, she says. “If we look at the labor force participation rates, it is lower among older workers. In other research we’ve done, many people are forced into retirement sooner than expected or planned.”

Many countries have a safety net similar to Social Security or an old age pension plan and they are experiencing the same difficulties as the U.S. with keeping those programs funded and sustainable.

Governments, employers and individuals all have a stake in how this problem is solved.

“No single entity can accomplish it all by themselves,” Collinson says. “Everyone needs to work together on this.”

Social Security is begging for reform, either through raising taxes, re-evaluating the benefits that are offered, raising the retirement age or a combination of all three, she says. In the current political climate, it is uncertain if saving Social Security will become an election issue or if the rising number of retiring baby boomers will demand that it be an issue, she says.

Automatic enrollment into a retirement plan appeals to just about every group, including vulnerable populations like women, lower income workers and younger workers, she says. When asked if they liked the idea of automatic enrollment, 75% of workers said they thought automatic enrollment at 6% of pay was very or somewhat appealing.

Most companies that offer automatic enrollment start at just 3%. Collinson believes that the industry should move to 6% since so many employees seem amenable to it.

The federal government’s new myRA program is another opportunity for people who aren’t yet saving for retirement to get started, especially if they are not offered access to a payroll-deducted IRA in their place of employment.

The myRA is a starter IRA, “like training wheels before riding the bicycle,” Collinson says. “It is a great way for people who aren’t saving yet and don’t have access to workplace savings to start.”

She adds that employers who either don’t offer a plan or offer a plan but don’t extend eligibility to part-time workers could really help the situation if they promoted the myRA to those employees not covered by their workplace retirement benefits.

It would make a difference for contractors, part-time workers and anybody on the payroll who has an opportunity to take part in direct deposit. The great part is that a myRA is an individual account that doesn’t go away when a worker changes jobs. Workers can just set up direct deposit from their new employer into the same account.

Many people who could save in a myRA could also qualify for the Saver’s Credit, a tax credit individuals could take for making eligible contributions to an IRA or an employer-sponsored retirement plan. The amount of the credit is 50%, 20% or 10% of your retirement plan or IRA contributions, up to $2,000 for an individual or $4,000 for a couple who is married and filing jointly, according to the Internal Revenue Service. The percentage is based on income. Lower income earners get to take the higher percentage, while those who make more than $61,000 as a married couple or more than $30,500 as an individual are ineligible for the credit.

Through its online survey in February 2016, Transamerica and Aegon surveyed workers in 15 countries: Australia, Brazil, Canada, China, France, Germany, Hungary, India, Japan, the Netherlands, Poland, Spain, Turkey, the United Kingdom and the U.S.

It found that the U.K. and U.S. have made the greatest progress when it comes to retirement readiness since 2012. Globally, people expect 46% of their retirement income to come from Social Security or other government retirement benefit program, the study found.

When asked what governments should do to address the risking costs of Social Security, globally, 31% said the government should raise taxes so they don’t have to reduce individual payments and 15% said that the government should reduce benefits without increasing taxes, the survey found. Twenty-seven percent felt the government should do a mixture of both.

Raising the retirement age was not a welcome idea, with 39% of respondents saying that the retirement age should remain the same. Only 20% thought it should increase with the increase in life expectancy, Aegon found.
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