Feeling pleased that I had survived another year and the annual predictions of the apocalypse, I made the mistake of picking up “Falling Short: The Coming Retirement Crisis and What to Do About It” (Oxford University Press).

Written by Alicia H. Munnell, the director of the Center for Retirement Research at Boston College, with Andrew D. Eschtruth, a colleague there, and Charles D. Ellis, a widely respected consultant and author, “Falling Short” does a fine job of clearly laying out the whats and whys of the impending crisis. It also provides a number of reasonable sounding alternative paths to avoiding financial Armageddon for the coming generations of seniors.

But when I put the book down, I was left with a queasy feeling in my stomach that we are destined to calmly continue down the path we are on until all those reasonable sounding solutions are no longer practical.

There is little debate over the source of the problem. On the one hand, we live longer and require health care that is increasingly costly. On the other hand, we are getting less from both Social Security and employer-sponsored plans, while any nest egg (and few people have much of one) generates little income because of historically low interest rates. The continuing trajectory of requiring more and more and having less and less means that every year that nothing is done, the hope for a sensible resolution in advance of a crisis becomes dimmer.

Nor is there much controversy over the main elements required to avert catastrophe: some combination of working longer, fixing Social Security and encouraging more savings earlier. Indeed, most of the recommendations in “Falling Short” have been made elsewhere by academics and various private and public commissions for years. But nothing much has happened and nothing in “Falling Short” suggests any likely catalyst short of an actual crisis.

When there is broad consensus on both a problem and a solution without any forward movement, it suggests that the obstacle is one of governance.

“Falling Short” does not dwell on the obvious shortcomings of the federal legislative decision-making process. However, when it comes to retirement matters, what exacerbates the problem is that individuals’ self-governance is as dysfunctional as anything in Washington. Multiple studies have shown that, left to our own devices, individuals save far too little for retirement, make terrible investment decisions with what they do save and make equally bone-headed choices about when and how to withdraw their savings.

As politically challenging as fixing Social Security is, passing laws to force individuals to behave more rationally around retirement is even harder. It may sound to a libertarian like the ultimate government overreach to tell individuals how to plan for retirement, but the failure to do so risks undermining the entire financial system.

Just last month at The New York Times DealBook Conference, Laurence D. Fink, the chief executive of Blackrock, the world’s largest asset manager, called this “the biggest systemic risk to our society.” Eighteen months earlier, he had called for legislation mandating retirement savings. Although a bill was introduced, it has gone nowhere.

The entire concept of retirement is relatively new. In the 19th century, according to “Falling Short,” half of 80-year-old men worked and “retirement” was unlikely to be more than a year or two. The 20th century brought the birth and expansion of both Social Security and private company pensions. By the dawn of the 21st century, both had begun to retrench just as the full implications of rising life expectancy and health care costs came into view.

Throughout this period, the roles of government, employers and individuals in meeting the needs of retirement have been constantly evolving. It is clear that individuals themselves will play a greater role than ever going forward, as 401(k)s and I.R.A.s replace defined pension benefit plans and Social Security replaces less of our previous income. Those decisions in turn will play a far greater role than ever on the health of our overall economy.

If we fail to find a politically palatable mechanism to ensure that these personal choices are made more intelligently than in the past, no amount of tinkering with Social Security will avert the coming crisis.

Source: New York Times Dealbook