Millions of Americans can't save for retirement. These economists have a plan to change that

This archival broadcast originally aired on April 6, 2021.

Congress is currently considering the “Retirement Savings for Americans Act,” an ambitious bill that seeks to create a national retirement system.

Back in April 2021, two economists told us about their bipartisan plan to help millions of low-income Americans save for retirement.

Teresa Ghilarducci, professor of economics at the New School for Social Research, and Kevin Hassett, vice president of the Lindsey Group and a distinguished visiting fellow at the Hoover Institution. Co-authors of a new proposal from the Economic Innovation Group that is aimed at building retirement savings for the bottom 50% of American workers.

Part I

DeLOIS ROBISON: My name is DeLois Robison. I have worked in and around Detroit schools and educational and cultural organizations since 1979, and I retired in 2015.

MEGHNA CHAKRABARTI: When DeLois was in her 50s, she loved her work developing educational programs for Detroit schools. She also ran a small business with her husband, selling African arts and crafts.

She never thought she'd retire. In the conventional way, her plan was to work for as long as she could.

ROBISON: I had had a great bill of health all of my life. And then at age 55, I had a heart attack. It became clear in 2005 when I had a second heart attack, that was it.

CHAKRABARTI: That was it for her life plan. DeLois scaled back, she worked from home, but the medical bills piled up.

ROBISON: So eventually I wound up burning up my money from my insurance and burning up eventually my retirement money.

CHAKRABARTI: So many working Americans, DeLois had scraped by to save for her eventual retirement. She had 64,000 in her 401(K), but as you heard, the medical bills burned through that money. After years of trying to keep up with work and her ongoing health problems, DeLois finally stopped working in 2015.

It was not the retirement she hoped for.

ROBISON: My retirement plan hinged on me being physically fit, and also my husband being physically fit. And then he passed away from a sudden, rare heart condition. And from one second to the next, he was dead, literally.

He was 62.

I roller skated until I was 50. Me and my husband met at the roller skating rink when I was 35. Two weeks before he passed away, we went roller skating. How in the world could that happen? So now I have to carry the heavy weight and I had to cover his burial, and I also have to take care of myself.

The issue for retirees becomes when, for whatever reason, you burn up what you had. And you're 70 years old. You have health issues. You don't want to go out to work and nobody wants you out there either. So I really don't have any savings right now. I don't have any needs that I can't cover with my social security, but I don't have anything there if anything unexpected happens.

Literally, when I end up paying, what I really need to have, I have about $50 going into the rest of the month. And so I feel I have been dealt an unfair hand. But at the same time, I rediscovered my spiritual side. Because at a certain point, there are just no answers, period. There's no comfort and joy.

And then you have to turn to something else. There's nobody whose fault it is or no thing whose fault it is. And just being angry for the sake of being angry doesn't make sense to me.

I just feel sad. That's all. I just take it by ear because I feel afraid to plan.

CHAKRABARTI: DeLois Robison in Detroit, Michigan. Now DeLois, like millions of Americans, is afraid to plan. Because she cannot. She simply cannot plan. She does not have the savings or the income to even begin to plan for a better retirement. It's just not possible. Now, in 2019, the Federal Reserve found that for the bottom 50% of American families, that's half of the country, the median retirement savings account balance was zero dollars.

Zero. Median. What, though, what if there's an elegant solution to this massive problem? And what if that solution already exists? So today we're going to explore the retirement gap in the United States and a possible fix that could be staring us right in the face. And I'm joined today by Teresa Ghilarducci, professor of economics at the New School for Social Research.

She's also author of Rescuing Retirement: A Plan to Guarantee Retirement Security for All Americans. Professor Ghilarducci, welcome back to On Point.

TERESA GHILARDUCCI: Oh, hello, really good to talk to you again.

CHAKRABARTI: Also with us is Kevin Hassett, vice president of the Lindsay Group and a distinguished visiting fellow at the Hoover Institution.

He served as chairman of the Council of Economic Advisors in the Trump administration from 2017 to 2019. Kevin, welcome to you.

KEVIN HASSETT: Thanks. It's great to be here. So you are co-authors of a proposal. Whose title I am not going to read just yet because it gives away something rather important. I'm going to start though by hearing, I want to hear from you both a little bit more about the extent of the challenge right now facing most Americans.

So let's start with a simple question. And Teresa, I'll go to you first. If you had to choose one word to describe the state of retirement security for most Americans, what would it be?

GHILARDUCCI: Insecure, nonexistent. Sorry, that was two.

CHAKRABARTI: We'll take nonexistent. Kevin Hassett, what about you?

HASSETT: Yeah, I think insecure is the right answer, or nonexistent. (LAUGHS)

Because I'll take nonexistent because you took insecure, then we're back to our quota.

CHAKRABARTI: Okay. And what are the driving factors for this persistent retirement insecurity? Kevin, go ahead.

HASSETT: Yeah. I think that policymakers have recognized for a long time that saving for retirement is an important objective for everybody.

But they've adopted policies that pretty much only give an incentive to do that, a tax incentive, if you're really rich. And the reason is that what you could do is you can shelter your income from taxes this year by putting your money in an IRA, but that benefit basically depends on how much tax you save, if you put the money in the IRA.

And because we have a progressive tax system, which means you tax people at the top more than people in the middle and the bottom, then basically we have really generous subsidies for saving for retirement for rich people, but nothing at all really for people, especially in the bottom half of the income distribution to pay almost no income tax.

And so really, it's the people at the bottom that are most urgently in need of help saving, and it's the people at the top who get the benefit of all the policies that currently exist.

CHAKRABARTI: And I was looking at some Fed numbers yesterday and today, and the skew is so evident when you just look at the numbers.

They tell the whole story. For example, the 2019 Fed report that I'm looking at, that if you look at the mean or the average of retirement accounts by age, according to the Fed, so I'll look at the 65 to 74 bracket here. And in 2019, the mean retirement account for 65 to 74 was 426,000, according to the Fed, and you're thinking, "Oh, that's pretty decent."

But then you flip over to the median, and it drops way down to 164,000. That's for people who are 65 to 74. If you push down to, say, 45 to 54, it's 100,000. And that's the median, or less. So it's like a perfect demonstration of who's holding all the retirement savings right now, Teresa.

GHILARDUCCI: Oh, that's right. I've spent my life, as we've talked for decades, on looking at the way we accumulate wealth in this country. And our big source of wealth that we do keep, the reason why we accumulate it is for this retirement savings. And we've had a 40-year experiment with the do-it-yourself voluntary system of your employer voluntarily putting you into a retirement plan, it's 401(K)'s usually, or you yourself putting money away for the IRA.

And after 40 years, it's a failed experiment. This voluntary, do it yourself, all the risk is on the individual, has just shown its true colors. That life happens, as the person that we met from Detroit at the top of the program. And she was not financially illiterate. She was not a live-in-the-moment person. She does plan ahead. She was married. She was a hard worker. But when you are dependent upon your health and your ability to sell yourself to an employer, you can't always plan your way around your whole life course.

And so we do need to follow the example of other parts of our labor market, where there's an automatic pension. Save for you, put aside for you. Or in other countries, where they don't leave it up to a voluntary kind of commercial system. And one of those pockets, maybe I'm getting ahead of you, is in the federal employees.

They have such a system, people in the auto industry, et cetera.

CHAKRABARTI: Yeah. Okay. See, you're teasing the rest of the show.

GHILARDUCCI:  Sorry.

CHAKRABARTI: So hold on. We received a huge amount of listener feedback on this topic. So let's listen to Elizabeth, an On Point listener from Vermont. She was a stay-at-home mom until her son was eight.

And then she reentered the workplace, and she said her salary did not keep up, because she had been out of the workforce for so long, didn't keep up with her age and her education.

ELIZABETH: I started way behind the eight ball, and now entering my fifties, I'm really concerned about being able to retire. I will never be able to catch up due to lack of salary, often lack of ability to have a job. And also, just not being able to save, living paycheck to paycheck, despite having a medical degree. And I'm one of the working poor who works full time plus, and I don't know what retirement is going to look like for me.

CHAKRABARTI: Now, Kevin Hassett, I promise that we're going to get to what your solution, you and Teresa's solution is, or your proposal. But I do want to ask you, Teresa said something a little earlier. Are we at a moment of reckoning with, as she put it, essentially a free market failure? In terms of how Americans were told they needed to save for retirement?

HASSETT: I think that it's a policy failure and since it's a policy failure, we talked about it, right? Like we all agree that subsidizing savings is a really good thing but that we focused all of our policy ammunition at people at the top. And so I don't know if I would call it a free market failure.

But listening to DeLois's story and the tragic heart problems that she and her husband had, and the sort of sudden realization that she's not going to be able to work to supplement social security and retirement, that's a very sadly common story and we need to do something to address it. Because it's not just DeLois.

Part II

CHAKRABARTI: Today we're exploring the retirement gap in the United States and a potential solution, or at least one proposal, for a solution that could be staring us right in the face. Now, we heard from a lot of you about your concerns regarding retirement insecurity, even to the point of intergenerational.

Here's Barbara Rosenberg from Everett, Massachusetts, who told us why she worries about her parents' retirement plans.

BARBARA: My parents immigrated to the United States over 30 years ago. While they've had steady jobs, they've not been able to save up for retirement as they held minimum wage jobs through their hard work and determination.

They put me through college and I feel obligated to help them in their retirement, while I'm also saving up for my retirement in 30 years. Their welfare in the future definitely worries me.

CHAKRABARTI: And here's On Point listener Michael. He's 43, currently collecting unemployment, and he doesn't think, when he gets back to work, that he'll ever be able to stop working in the future.

MICHAEL: I was a professional chef, high end, working for literally the world's biggest named chefs. And, working hours, 60, 70 plus hours a week. Physically, mentally exhausted and it never has panned out, never panned out, and it just never got to a point where I was able to save.

CHAKRABARTI: Just a small dip into the masses of On Point listeners who reached out to us on this topic. I'm joined today by Kevin Hassett and Teresa Ghilarducci, they are two economists who have a new proposal from the Economic Innovation Group. That proposal asks the question, quote, "What If Low-Income American Workers Had Access to Wealth Building Vehicles Like the Federal Employees’ Thrift Savings Plan?"

So Teresa, there it is. What is the Thrift Savings Plan?

GHILARDUCCI: If you're a federal employee and as Republicans and Democrats cycle in and out of the White House, they learn about it. It's the pension plan for federal employees. It's real simple. I have a similar one as a college professor.

... But what you do is that you are automatically enrolled into a retirement account, the employer in this case, that employer is the federal government, contributes a bit, you contribute. And you have choices of very low fee, very well curated retirement funds. And you get a lot of advice about how to invest.

Most don't choose. So you're automatically put into one that's appropriate to your age in terms of risk and reward profile and you go about your business. You just don't worry about it. The money flows in every month and it accumulates, and it's invested professionally for you. And when you retire, it's there to supplement your social security.

What's really great about that is that we have a workforce, a federal workforce that doesn't fret about whether or not they have enough or where it's invested. They go about doing the nation's business. Or if you're working at a university or you're working at a car plant, you go about and do your job.

And you're not trying to beat the market, or play investor or worry, or worse, Meghna, we talked about this. You feel ashamed that somehow, you're doing something wrong. And so what the Thrift Savings Plan does, or any automatic pension plan at work is that it takes the shame out of preparing for retirement.

It's easy, it's professional, and you're not getting ripped off. Because a bigger organization is looking after you and clearing your way through the predators, who want your money, and investing it wisely.

CHAKRABARTI: Okay.

GHILARDUCCI: And one of the best things about it is that it's paid out as an annuity, so the people that we just met on your show don't have to worry about running out when they're in their 70s or 80s.

CHAKRABARTI: Huh, okay. So this is currently available to federal employees. There's a lot to dig into, various parts here that I want to explore in depth. But first, Kevin, Teresa said something interesting. She said Democrats and Republicans, when they enter government, they all universally discover this plan.

You worked in the Trump administration. Did that same experience happen to you?

HASSETT: Oh, sure. Although I worked at the Federal Reserve before. And yes, I am a beneficiary of the Thrift Savings Plan. I've experienced up close how well it works and how well designed it is. And since you're a person who digs through tables and Federal Reserve reports, you'll appreciate.

CHAKRABARTI: (LAUGHS)

HASSETT: I honestly think I make a strong statement that the federal government's Thrift Savings Plan is the best designed federal program that I've ever seen. And this is why. There's been an enormous revolution in economic science in understanding what motivates people to save and what happens when people learn the benefits of saving and so on.

And that literature has evolved dramatically over the last 15 years or so. And every time that there's like a new consensus in the literature, the TSP sort of changes what it does to take advantage of it. And so I've never seen such a nimble and brilliant and efficient program as the Thrift Savings Program that's run by the federal government.

And I know a lot of my conservative friends, I think the federal government could never do anything right. But there's no way you could argue that the Thrift Savings Plan isn't brilliantly designed and the people who've done that really deserve accolades.

CHAKRABARTI: And how, given that it covers all federal employees, it must be huge.

HASSETT: Yes, it's the largest retirement program in the world. And it also includes military people who are of course federal government employees, as well. But yes, this is an enormous program and the funds themselves are run by private companies who have to make really low bids to get access to all that capital.

The people who participate get mutual funds and so on with expense ratios that have costs that are really close to zero. And it's just, it's absolutely a fantastic program. And, but the really cool thing, and this is the, I can tell Meghna, your pulse is starting to --

CHAKRABARTI: It is.

HASSETT: The really cool thing is that because they're federal workers, and because people were paying their salaries and so on, that there's an enormous amount of data about the people who participate in the Thrift Savings Plan. And the Congressional Budget Office was able to get all that data, including like their salaries and what they put into the TSP Program and so on, and study it really carefully.

And so, we know more about who participates and what the different policies do for participation, how participation changes depending on your race or your sex or your income. We know more about this program than we probably know about any program, because we've got the best data imaginable. Because the CBO has access to basically everybody's employment records.

CHAKRABARTI: I just wonder, it seems to me that CBO data might just be confirming what seems to be common sense to me that there are very few people I can imagine who don't want to have a secure retirement. So when you make it as easy as possible to do your part in order to achieve that future security, most people will participate.

But this, right now, the TSP, as we're discussing, is for federal employees and military members. So Teresa Ghilarducci, what are you and Kevin Hassett specifically proposing?

GHILARDUCCI: And it is amazing that you have Kevin Hassett and Teresa Ghilarducci in the same sentence, because we really do live in different worlds.

We come from very different perspectives on the economy, but we came together here as economists, like looking at the same data. And I can't tell who's speaking, him or me, in terms of how important this is and what a good idea our idea is.

So our idea is that everyone have access to the Thrift Savings Plan and we're just proposing this framework to congress They'll work out the details about who everybody is. But for right now Kevin and I have modeled what this program would mean for people below the median, people who are low-income, low-middle income, who don't get any benefit from the federal help now because of the tax deduction.

So we are proposing that everyone get access to the TSP architecture. That they're automatically enrolled at work into their account and that the government matches their contribution, whether or not the government contribution comes first or the employee contribution comes second. We have to worry about low-income workers not having enough money to save.

Perhaps their earned income tax credit can be deposited, or an increase in the federal minimum wage, that really, those details don't really matter for the big picture. But what matters is that workers will be automatically enrolled in a TSP plan. And if they move from job to job, that account goes with them.

They are de-linked from the employer, whether or not the employer wants this, the employer could pay their portion if they wanted to, but it's not up to the poor employer to have to decide or sift through all that. So it basically opens up for all Americans what federal and military workers have now.

CHAKRABARTI: Okay. And Kevin, this is your, excuse me. I'm like, yeah, I am so excited. I'm punching my microphone. But what about this plan appeals to you, Kevin? Again, as Teresa said, having both of you sitting at the same table, actually on the same side of the table, is quite a rare occurrence. So what appeals to you about this?

HASSETT: Let's think about a person who, say, is making $30,000 a year. And in the current Thrift Savings Plan, you can contribute up to 5% of your income into your retirement account, and the government matches. And so if 5% of 30,000 is $1,500. And so you could put $1,500 into a retirement account this year, and then the government will match that, which basically, in some sense, you could say, takes your income, $1,500 above $30,000 because you're getting that income from the government, but then it goes into a retirement account.

And then it starts to compound, and if markets go up, then it'll get bigger and bigger over time. And Teresa and I have run the numbers and, basically, a person right now, a relatively low-income person who's just starting out in their career, by the time they retire, would be looking at a retirement account.

That's about 10 times bigger than the account that DeLois talked about in your introductory segment be up above $600,000. And so the fact is that the Einstein called compounding the most powerful force of the universe. So the mystery of compounding, and steady contribution and government matching, then we can fundamentally alter the distribution of who owns what in our society.

And I think that people who are traditionally big fans of Theresa's work, and I'm always a fan of Theresa's work, even when I disagree with it. But they're going to be really happy about it. Because they recognize that this is a way to help people at the bottom. It's not a welfare program, but it's a way to take government money and throw it at people at the bottom.

But people on the right should recognize that what this does is that it connects people to society in a way that they're not right now. And where there's good news about markets and American business, there aren't a lot of, you don't see dancing in the streets.

That's because the people who own those things are very concentrated at the top. And if you have very widespread ownership, then you might have a much more stable society.

CHAKRABARTI: Okay, so yes, even though I personally think this is a fabulous idea, I'm going to do my journalistic duty, because I want to poke at different places in it, okay?

So first of all, and Kevin, I'll just start with you, and I'll go back and forth between the two of you. That match. That government match. It sounds great if you're on the receiving end of it. You used DeLois as an example, that she said she had $64,000 saved.

Under your plan, over the working lifetime of a person, maybe they could have up to $600,000 saved, but how much would that match cost the government?

HASSETT: It's actually another amazing thing about the program. Because what happens with people, especially low-income people, say with incomes below $30,000 is that they pay very little income tax. That when we basically say, "Okay, you could put your money in an IRA and you won't pay tax on that," that it's not that big a benefit, right? Which is one reason why we've been saying that the current benefit of IRAs and 401(K) is very tilted towards the wealthy.

So you're not losing a lot of tax revenue from the people who participate. So really the cost is just the cost of the match. And we've run some numbers and let's just say that compared to everything that's been going on in the last year, it's a tiny little bit of money. And --

CHAKRABARTI: If I could just jump in, everything that's been going on in the last year has a capital T in terms of trillions of dollars.

How much is a relatively tiny amount? It still could be hundreds of billions.

HASSETT: Yeah, it would, it depends on how many people we allow to have access to it or so on, but you're basically looking at something like $50 billion a year.

CHAKRABARTI: A yeah.

HASSETT: A year to fund this program. But don't forget that what that means though, is when you do that, like the government, you could say is spending, is borrowing $50 billion at an interest rate that's pretty close to zero and giving it to you. And you're investing it in mutual funds and so on that have a rate of return that's well above that.

And so society as a whole logically has to come out ahead. Now, it'll still cost us some revenue, but when people take that $600,000 out when you retire and start to consume some of that money, then you will pay taxes.

CHAKRABARTI: That's right. Tax deferred. Exactly.

HASSETT" And so it's, we're moving taxes off into the future. But we're going to get a lot more revenue in the future because of the mystery of compounding. There'll be a lot more income.

CHAKRABARTI: Okay. So this seems reasonable. Teresa, here's the other place I want to poke.

You talked about the fact that federal employees are auto enrolled. And we talked about the match, talked about the fact that it's an annuity. I'm just wondering why your plan says let's just expand this federal program for everyone.

And you're not instead saying maybe 401(K) or 403b or whatever, should, we can change the tax code such that these same elements can still come from private sector retirement plans, that like everyone should just be auto enrolled in the plan they have access to.

GHILARDUCCI: Yeah. Yeah. Yeah. That's a great question. On the first one, I'm going to poke back on the money, too. $50 billion is $50 billion a year. But right now, we spend $250 billion and 70% of that goes to the very top.

Again, those people who have 401(K)s. You asked why not just let people to be auto-enrolled in a 401(K) or an IRA plan rather than just auto-enroll in this government plan. It's because the employers, most employers don't have a 401(K) at work. And the IRA is an unwieldy voluntary instrument.

It doesn't happen at work. So what this plan does is just de-link everybody from what your employer has to do or what bank branch you're near. Or what brother-in-law you might have that's trying to sell you this stuff. And just automatically enrolled in Social Security, which is a really good government program, as well.

So it just exists side by side and you're connected ... to that account and your employer is delinked from your accumulation.

CHAKRABARTI: So just a second though, just to be clear theoretically you could, if you had five dollars. At the end of the month, you could put it in whether or not you're working, Teresa.

GHILARDUCCI: That's right. That's right. That's right. Exactly.

CHAKRABARTI: Okay. Kevin, we've just got about 30 seconds before the break, but go ahead.

HASSETT: Yeah so also what the beauty of TSP is, we know it works, we've seen it in a large population, not every federal worker is making a lot of money, so we even know that it works for low income people, but once you're defaulted into the age appropriate and all that, then you can change, it's your money, so if you want to move it to something else that is over in the other quarter, a different type of mutual fund or something, then that's certainly something that you can do. But tend to keep the defaults, because the defaults are so well thought out by experts.

Part III

CHAKRABARTI: Today, we are talking about an innovative idea that dares to suggest there might be a way to help millions of low-income Americans achieve a secure retirement. And I'm joined by Teresa Ghilarducci, professor of economics and director of the Schwartz Center for Economic Policy Analysis at the New School.

Kevin Hassett is also with us. He's vice president of the Lindsay Group and a distinguished visiting fellow at the Hoover Institution. He served as chairman of the Council of Economic Advisors in the Trump administration from 2017 to 2019. And so they come from different sides of the aisles, if I can use that old cliche, but they've come together.

And have a new proposal from the Economic Innovation Group that asks this question: "What If Low-Income American Workers Had Access to WealthBuilding Vehicles Like the Federal Employees’ Thrift Savings Plan?" Now, Teresa and Kevin, I wonder if you could listen along with me for a few minutes here because, as I said, we've got, we received so much feedback from listeners on this idea and this topic.

And as you mentioned before, ideally, retirement savings work, because for folks who can start saving early, they achieve the magic of compounding and then if they continue to save over their working life, that's how the system is supposed to work. But the truth is, for millions of people, those two things do not always go together.

LISA GRANFIELD: When I was younger, I never thought I needed to think about retirement.

CHAKRABARTI: This is Lisa Granfield. She lives in Walpole, Maine.

GRANFIELD: My father actually passed away when I was young, and I've always basically been on my own, supporting myself, and just never really had that extra money. Anybody to even advise me, I think that was one of the things that he would have taught me about.

CHAKRABARTI: Lisa was 19 when her father died. She dropped out of nursing school. But a decade later, she went back to school and has been in nursing ever since, almost 30 years, though not consistently. Now, at age 58, Lisa works part time at an assisted living facility.

GRANFIELD: And I'm so grateful that I have the job I have. I'm only able to work part time at this point, and I try to pick up extra time, but I have some health issues that have developed over the years. So I've had periods of unemployment, surgeries, but the work is really physically demanding. I'm at a point where I'm having trouble meeting those physical demands.

CHAKRABARTI: But for now, she still does her shifts and shows up for her patients, which earns her about $2,400 a month. It doesn't last long.

GRANFIELD: Usually, my debits are more than my credits. I have a little bit of a savings, and I switch it back and forth to cover things. There's the mortgage, the car payment, electricity, phone, computer.

Food is outrageous.

CHAKRABARTI: Lisa is single. And even though she's a homeowner, she's got years to go on her mortgage and has already had to rely on family to help hang on to her home.

GRANFIELD: I would have lost this house if not for my sister helping me and my brother helping me. And so I'm trying to figure everything out and it literally keeps me awake at night thinking about what would happen if I lost my job?

CHAKRABARTI: And as she lays awake at night, Lisa told me her mind obsesses over the litany of unforgiving options people face when they don't have retirement security. Should she refinance her home? Will she even qualify for a new loan? Would it give her enough to live on if she loses her job? She'd be taking equity out, but it'll give her cash for repairs if she has to sell.

Would there be enough money left over to make rent on a new place?

GRANFIELD: I feel hopeful.

CHAKRABARTI: Hopeful for what? Hopeful that I'm gonna make it.

CHAKRABARTI: But what does that mean?

GRANFIELD: That I'm just gonna keep working and trying to improve my situation. Who knows? Maybe I will win the lottery. (LAUGHS)

CHAKRABARTI: Lisa is anxious about her future, even though she does have some retirement savings. Years ago, she started a small Roth IRA. The health care company she works for now offers a retirement plan where she contributes 3% of her pay.

So what has all that amounted to?

GRANFIELD: I can honestly say that I have probably less than $30,000 and I'm 58. I think I probably should be contributing more. But I'm one catastrophic event away from losing everything I've worked for.

CHAKRABARTI: I keep coming back to this part of our conversation. You hear how much Lisa is wrestling with herself.

And she did that almost the entire time we talked. Every time she talked about her financial fears, she'd catch herself.

GRANFIELD: I feel fortunate in so many ways.

CHAKRABARTI: Even as she talked about the real struggle to pay bills.

GRANFIELD: I'm really not that bad off.

CHAKRABARTI: As she talked about her health challenges.

GRANFIELD: There are so many people out in the world who are really struggling.

CHAKRABARTI: Or when she put a brave face on what would happen if she had to stop working.

GRANFIELD: My life is good. It's a beautiful day in Maine.

CHAKRABARTI: Through it all, she kept chiding herself that somehow it was her fault for not finding a way to save more for her retirement.

GRANFIELD: I think, "Oh my, how could I have been so stupid? Really?"

CHAKRABARTI: The system is designed to make people feel bad about themselves. That's how Monique Morrissey, an economist at the Economic Policy Institute, described it to CNBC. And consider what that system is. Almost 30% of Americans nearing retirement age have no access to a pension or employer retirement plan.

76% of all Americans fear they will not achieve a secure retirement. "Everyone privately thinks that they're screwing up," Morrissey added. And yet if everyone is screwing up, then it's clearly a system flaw.

Nurse Lisa Granfield is living in and trying to navigate that system. So I asked her, how long does she think she'll have to do it? How long will she have to work?

GRANFIELD: Barring that I'm disabled or mentally incapacitated somehow, I'm just going to work as long as I can. I keep saying, I'm going to just, I'm just going to go from being a nurse there to being a patient.

That's what I tell the girls I work with, and we all, we have some nurses at my facility that are 72 or 73 years old, and they're still coming in and taking shifts. God bless them.

CHAKRABARTI: Lisa Granfield lives in Walpole, Maine. Now, Teresa Ghilarducci talk about this for a second because I could not, we couldn't find a single person who didn't echo what Lisa said. There's this deep-seated sense that it is an individual's responsibility to set aside enough for retirement and if for some reason they can't do it, there's something wrong with them.

Can you talk about that?

GHILARDUCCI: I can even though I'm trying to get over my emotions. Every time, I've heard thousands of these stories, in 30 years, a lot of them are from women. The men can barely talk about it, because their shame is almost even deeper. And it makes me angry that we've built a system where there's so many hardworking people are blaming themselves.

Some of it is the economics profession, that have said that people are hyperbolic discounters, that they live for the moment, that they don't save enough, that they can't look ahead. It's been a drumbeat of chiding, of not having enough financial literacy and that the system was really good, it's just that the humans had to change.

And I think Kevin and I have come together and say, "No, humans are just fine. The system has to change." And people who have an employer that's had a plan for their whole life who may be in the auto industry, may be in teaching, may be in the federal government, don't have this this sense of shame.

They have a sense of security, and it's just a matter of luck, not personality. And so I think the most important aspect, and I'm going to just say it slowly for emphasis, the most important aspect of our plan is that we tell workers and human beings that they're all right, that the federal government can design something that works for them.

It's worked for many other Americans and that everybody has access to it. And I really want to stop this narrative in 5 to 10 years where people who work hard, think that they're doing something wrong.

CHAKRABARTI: So Kevin Hassett, let's talk about the political challenges to achieving what Teresa Ghilarducci just talked about, because it is very deeply ingrained in, if not in American life, American politics, this notion of individual responsibility.

And I can already hear the voices on Capitol Hill saying, "Wait, you're proposing that we should expand a program to all Americans, whether they're working or not. A lot of those folks might be undeserving of that." How would you overcome that political pushback?

HASSETT: First, I have to say that Teresa and I have been talking to folks all across the political spectrum and I joke with Teresa that it feels like sometimes that my friends drag their knuckles a little bit more than hers do but the sort of knuckle dragging conservatives actually see the wisdom of this.

I have yet to hear any pushback at all. And we've talked to lots and lots of people, that is what you might expect. Because the problem is so obvious, and I want to actually refer back to this really moving interview with Lisa to say two things that jumped out at me about that. And there's one thing about our plan that we haven't talked about yet. That I need to add, but also another thing about the sort of injustice of the current system that if you're a wealthy person that --

CHAKRABARTI: Kevin, you back with us?

HASSETT: That you can shelter, right now under the current law, $58,000 a year from tax. And Lisa's been working her whole life and she's got less than that. From her lifetime savings, whereas a wealthy person gets to shelter $58,000 a year right now under current law.

And so it really seems like the law is out of whack for what it is trying to accomplish. And then the second thing is, and it's a little bit different from your question, but your interview really brought it up, is that there is this problem, that low-income people, that we know, for example, that about 40% of Americans, that if their car broke, they wouldn't have the money to fix it.

And they might not be able to get to work. That they don't have a lot of money. They haven't been able to save much, because they're just barely scraping by. And if you tell them, "Hey, you have to put your money in a retirement account and leave it there until you're 65." Then that basically exposes them to risk. Which Lisa referenced. Like I'd like to save for retirement, but I'm worried I'm going to lose my house, right?

And so what Teresa and I recognize is that that's a risk. And that if you're going to make people, it's almost mean spirited to say, "Hey, you can put money away, but you got to leave it there for 35 years." Because they might have an emergency where they need the money. And so our view is that you ought to be able to take money out of this retirement account if it's money you put in, but that the government match is going to stay there for you all the way.

CHAKRABARTI: I see. Okay. So we've got about three minutes left here. Teresa Ghilarducci, you've been, so you and Kevin have been talking to people in Washington, to people on the Hill, and hearing Kevin say there hasn't been any pushback yet, I'll admit, actually surprises me. Because I could imagine, maybe this is a problem with media sensibility, but I could imagine that there was, there might be some who say this is a radical proposal that you've got here.

You want to expand retirement for all? What are folks going to ask for next, health care for all? I only say that as a sort of comical way to really actually shine a light on the kinds of things that stop good ideas in Washington.

GHILARDUCCI: I've been doing this for 30 years and I couldn't get past Democrats, who were just afraid of a non-voluntary program.

But I think this is an idea that's coming from below. Union members, workers like Lisa, and it doesn't matter what political party they are, they all want some kind of security. They want a safe place to save their money for their retirement, to supplement social security.

Wide support for social security, both by Republicans, who are just real people, real Republicans and real Democrats, who are just workers. They love social security. And I think it's taken 30 years for the politicians to get it. That this is about supplementing social security.

And I am the most hopeful I have been for 30 years that something will happen. We also have mayors and governors who say, "My state can't afford a wave of poor elders in my state or in my city." Because they're the first line to defense, providing the emergency aid, providing the shelters. We saw a big movie, a movie called Nomadland.

It was based on a journalistic report on what happened to elders in that last recession. We could have tens of millions of elders who are middle class workers falling into poverty. So the alarm about needing to plan to supplement Social Security is upon us. It feels a little bit like climate change, like finally everybody is getting it, that this is a slow-moving problem, is now getting fast moving.

The only pushback that we have been getting for the last two weeks are from the private 401(K) industry.

CHAKRABARTI: (LAUGHS)

GHILARDUCCI: They may be threatened. Watch for that.

CHAKRABARTI: That did make me laugh.

GHILARDUCCI: Not from the politicians. Yeah.

CHAKRABARTI: Of course, the pushback is going to come from somewhere.

GHILARDUCCI: You're not the target. That's why you can laugh. (LAUGHS)

CHAKRABARTI: Oh my God, the pushback. Yeah, all those transaction fees. Oh my gosh. But Teresa Ghilarducci, Professor of Economics and Director of the Schwartz Center for Economic Policy and Analysis at the New School. Thank you so much for joining us today.

GHILARDUCCI: Yeah. Thank you.

CHAKRABARTI: And Kevin Hassett, Vice President of the Lindsay Group and Distinguished Visiting Fellow at the Hoover Institution. Thank you so much, as well. It's great to have you.