Private accounts are essential to solving the retirement challenge.

When it comes to the financial challenges of retirement, "most U.S. workers are not ready for what lies ahead. This sad fact keeps government policy-makers as well as older workers awake at night worrying about the future," says Peter Lefkin, Allianz of America's Senior Vice President of Government and External Affairs.

Mr. Lefkin lays out the problems facing aging baby boomers still suffering from 401(k) and personal savings account losses caused by the 2008 financial crisis.

Help will not come from the government, he warns. The Social Security and Medicare programs are already showing financial stress, which will only increase in the coming years. Thousands of baby boomers are expected to retire each day between now and 2029, adding even more demand on these programs. At the same time, there will be less revenue coming in as these new retirees stop working and paying taxes.

With these institutional solutions in crisis, it's retirees themselves who must bear a greater share of the responsibility of funding their retirement. Expanding the number of people saving and increasing the amount of dollars that they have in private accounts is essential to solving the retirement challenge.

This means an increased focus by policy–makers to find ways to increase private retirement savings. But while both Democrats and Republicans believe that more should be done to promote this, Mr. Lefkin cautions that "This is easier said than done, as the preferred approach — tax incentives or tax credits for lower-income individuals — costs the U.S. Treasury money. This is something that it can ill afford given the massive size of the budget deficit."

On a more hopeful note, Mr. Lefkin notes regulatory action being considered by the Department of Labor that would enable the conversion of at least part of 401(k) or other employer-sponsored defined-contribution plans into an annuity.

"This is modeled after programs in the United Kingdom, Chile and several other nations," says Mr. Lefkin.

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The views expressed above reflect the views of Allianz of America as of the date referenced. These views may change as market or other conditions change. This report is not intended and should not be used to provide financial advice and does not address or account for an individual's circumstances. Before making any decisions regarding your financial situation, please consult a financial professional or tax professional to discuss your individual circumstances and objectives. Past performance does not guarantee future results and no forecast should be considered a guarantee either.