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The United States is facing a retirement crisis, as many of today’s workers will lack the resources necessary to retire at a traditional age and maintain their standard of living.

This time on Financial Sense’s Lifetime Income Series, we spoke with Alicia Munnell, Professor of Management Science at Boston College, to discuss her must-read book Falling Short: The Coming Retirement Crisis and What to do About It.

Three Options Moving Forward

Munnell describes three big approaches in her book: We can accept a lower standard of living, save more while we’re working, or work for a longer period of time.

It’s possible to move from an area with a high cost of living to someplace more economical, she noted, adding that she’s a big fan of people electing to work later in their lives to help extend retirement savings.

For those already facing a retirement shortfall though, there are other options. One attractive approach that many people eschew is tapping into home equity.

“Tapping the home, which is something people have traditionally been reluctant to do, is going to become an absolute necessity,” Munnell said. “We need to set up arrangements to make it easy.”

Another option many people often ignore is purchasing annuities.

“Annuities are an answer, but for a whole variety of reasons, including costs and other reasons, they’re just not very popular in the United States,” Munnell said.

Americans Just Not Saving Enough

Munnell has found that many people will not have enough assets to cover expenses in retirement. It used to be that defined benefit plans covered by employers would provide for workers in their retirement years, but that reality has now almost completely changed.

Instead of receiving an income for life, most workers have been shifted onto 401k plans where they have to build up their own assets and manage it themselves when they stop working.