The Road to Retirement - NYTimes.com Even before the Great Recession, Americans were not saving enough, if anything, for retirement, and policy experts were warning of a looming catastrophe. The economic downturn and its consequences - including losses in jobs, income, investments and home equity - have made that bad situation much worse. And yet, judging by the presidential campaign, this clear and present danger is a political nonissue. Medicare, of course, is an issue. But Social Security, a critical source of income for most retirees, is barely mentioned, though the parties have sharply different views on how to improve it. The Democratic platform correctly acknowledges that it can be strengthened and preserved, implying that a modest mix of tax increases and benefit cuts is needed. The Republican platform vows to "give workers control over, and a sound return on, their investments." That sounds like privatization, which would be cruel folly. Neither side, however, is grappling with the fact that the nation's retirement challenges go well beyond both programs, and that most Americans, by and large, cannot afford to retire. The crux of the problem is that as traditional pensions have disappeared from the private sector, replacement plans have proved woefully inadequate. Fewer than half of the nation's private sector workers have 401 (k) plans, and more than a third of households have no retirement coverage during their work lives, according to the Center for Retirement Research at Boston College. The center also found that among people ages 55 to 64 who had a 401 (k), the recession and slow recovery left the typical worker with just $54,000 in that account in 2010, while households with workers in that age group had $120,000 in all retirement accounts on average. That is not nearly enough. Nor do most Americans have significant wealth in other assets to fall back on. According to Federal Reserve data, median net worth declined by a staggering 40 percent from 2007 to 2010, to $77,000; for households near retirement, ages 55 to 64, the decline was 33 percent, to $179,000. Home equity, once thought of as a cushion in retirement, has been especially devastated. The bursting of the housing bubble has erased nearly $6 trillion in equity, and left nearly 13 million people owing a total of $660 billion more on their mortgages than their homes are worth, according to Moody's Analytics. A separate study by AARP has found that as of December 2011, people ages 50 and older accounted for 3.5 million underwater loans, with 1.2 million in or near foreclosure. That is on top of the more than 1.5 million older Americans who have already lost their homes in the bust since 2007. Many people who are coming up short take refuge in the notion that they can continue working. But can they? Working longer can help to rebuild savings, and, more important, allow one to delay taking Social Security, which improves the ultimate payout. As a practical matter, however, keeping a job is no sure thing. Workers ages 55 to 64 have been less likely than younger ones to lose their jobs in recent years; their jobless rate has averaged 6.1 percent in the past year, compared with 7.3 percent for workers ages 25 to 54. But when older workers become unemployed, they are much more likely to be out of work for long periods and less likely to find new jobs, while those who do become re-employed usually take a big pay cut. More saving is clearly needed, along with ways to protect retirement savings from devastating downturns. The question is how. In addition to strengthening and preserving Social Security, the nation needs new forms of retirement coverage, along the lines of the "Automatic Individual Retirement Accounts" that President Obama has proposed in recent budgets, which would require companies that did not offer retirement plans to automatically divert 3 percent of an employee's pay into an I.R.A., unless the employee opted out. A similar plan was recently proposed by Senator Tom Harkin, Democrat of Iowa. The proposals are not cure-alls, but they could be important steps toward an ultimate aim of expanding retirement coverage and reducing reliance on 401 (k) "s, which have proved far too vulnerable to investing mistakes and market downturns to be the core of a retirement plan. Millions of Americans are headed for insecure retirements, but with new policies, millions more could escape that fate.