Richard Johnson, a senior research associate in the Urban Institute's Income and Benefits Policy Center, is a leading national expert on the health and income security of older Americans. Many of his recent articles home in on future retirees, whose numbers will soar once Baby Boomers begin reaching old age in coming years.

One major quandary facing the country right now is Social Security reform. Johnson has shown that cutting Social Security COLAs along the lines suggested by Alan Greenspan would substantially reduce family incomes for the oldest and most vulnerable retirees. Yet, if current policies continue, Johnson argues in another article, income after taxes and health care spending for the typical older married couple will be no higher in 2030 than in 2000-despite 30 years of productivity growth.

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The headlines might be a bit overblown at times, but the facts behind them are real. Social Security is running out of money. People are living longer and having fewer children. This leaves fewer working-age people to support each retiree.

This demographic imbalance means that by 2019, Social Security will begin paying out more in benefits than it receives in taxes. The CBO [Congressional Budget Office] projects that the trust fund accumulated over the years to pay the Baby Boomers' retirement benefits will run dry in 2052. As a result, future Social Security benefits will decline unless taxes rise, other government services are cut, or the government borrows from future generations.

Some large employer pension plans are also in trouble, particularly in the airline and steel industries, because the firms themselves are in or near bankruptcy. The good news for retirees is that a federal agency insures accrued pension benefits, so that retirees will continue to get their pension checks, up to about $44,000 per year now, if the company folds.

The bad news for taxpayers, however, is that they may be left holding the bag. The federal insurer collects premiums from pension plans to cover insurance losses, but it doesn't have enough assets to cover all the plans that are in trouble. Taxpayers may have to bail out the agency.

2. How can workers protect themselves in retirement?

Save as much as possible and delay retirement as long as possible. Saving for retirement isn't easy, especially when families are struggling to raise children, accumulate a down payment for a new home, and pay tuition bills. But if people start early they can accumulate a sizable nest egg for retirement by saving even a modest amount each period.

Workers should especially take advantage of the opportunity to engage in tax-deferred saving by participating in 401(k) plans, if their employers offer them. People should be sure to rollover their account balances into other retirement plans when they change jobs — not spend the money. They should also avoid the temptation to borrow against their retirement savings when they are young.

The other step people can take is to work as long as possible. We found, for example, that people could double their retirement income by retiring at age 65 instead of 55. Delayed retirements would more than offset expected shortfalls in future Social Security benefits.

3. Is it realistic to think people will really stay on the job longer?

I think they have to. Many people are now spending nearly half of their adult lives in retirement. That's really astonishing considering that not so long ago most people didn't retire at all. With jobs becoming less physically demanding and health improving, many people can work well into their 60s and 70s. The economy simply can't afford to lose the contributions of such a large and productive segment of the labor force.

In fact, Americans are already starting to work longer and delay retirement. There are several possible reasons for this trend. Employer-sponsored pension plans are changing, and the traditional plans that subsidized workers who retired early and penalized those who worked until later ages are becoming much more scarce. Changes in Social Security have also encouraged work at older ages.

The family is changing too. Husbands and wives usually want to spend time together in retirement. Now that both spouses often work, many couples must coordinate their retirement decisions. Because husbands are a few years older than their wives on average, some men work later while waiting for their wives to get old enough to earn significant retirement benefits. And with people having children later, parents sometimes have to wait to retire until they've stopped paying for their children's college tuition.

Although the trend toward later retirement is encouraging, policymakers can do more to keep older workers in the labor force. We should allow older workers to dip into their employer pension benefits before they completely leave the labor force. That way, more people can gradually phase into retirement. We should seriously consider raising the age at which people can first start to collect Social Security benefits, which currently stands at age 62. And it may be time to raise the age of Medicare eligibility from 65 to 67 to send a strong signal that 65 is no longer the normal age to retire.

4. Which groups are most at risk of financial insecurity after retirement?

The groups at greatest risk are the same ones at most risk at younger ages — African Americans, Hispanics, those with limited education and earnings. These groups tend to rely solely on Social Security payments at older ages because they often lack employer pension benefits and have been unable to accumulate much savings outside of Social Security. Widowed and divorced women are also at high risk because many lose at least part of their husbands' retirement benefits when they divorce or become widowed.

Lots of other people are at risk, especially because medical and long-term care expenses are growing so fast for those at older ages. Medical costs are increasing faster than inflation, Medicare and Medigap premiums are rising, and employers are cutting back on retiree health benefits. Nursing home care now costs upwards of $70,000 per year, and with people having fewer children and women working more, fewer adult children are around to care for elders at home. And everyone's living longer, so savings have to last longer too. People retiring now should plan for the possibility of living to 100.

5. What's the biggest challenge facing the next administration concerning Social Security?

Building a consensus that reform is urgent. Tax revenue is not expected to fall short of benefit payments until 2019, so Social Security will not be a net drain on government budgets for another 15 years. That's close to a lifetime in the political world. But it's not a long time for families making work and savings decisions for retirement.

The faster the system is reformed and the long-term financing problems addressed, the less brunt for taxpayers and future retirees. And fast action makes more time available for families to adjust their long-term retirement planning to account for lower benefits and possibly higher retirement ages. Hard choices have to be made, but delay will not make them any easier.