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Economist Mark J. Warshawsky, a keynote speaker at this year’s Virtual 50+Expo, has been focused on the coming insolvency of Social Security for most of his career.

“Changes are needed. It’s an old-fashioned program,” said Warshawsky, senior fellow at the American Enterprise Institute in Washington, D.C. “Action needed to be taken years ago, but our system is pretty slow.”

Warshawsky, who served as Social Security’s Deputy Commissioner for Retirement and Disability Policy from 2017 until earlier this year, addresses the threats to the program in a recorded keynote address that can be viewed at beacon50expo.com starting November 1.

A Chicago native, Warshawsky encountered his future career during his freshman year at Northwestern University. His very first class in college was macroeconomics. “It made sense to me,” Warshawsky remembered. “It really appealed to me, so I kept at it.”

Warshawsky went on to earn a PhD in economics at Harvard, where he wrote his dissertation on annuity markets — “a major theme for me in my research career,” he said.

Years of government service

Warshawsky’s resume spans both government and private industry.

His recent stint as Social Security’s deputy commissioner wasn’t his first time at the agency; he served on the Social Security Advisory Board from 2006 through 2012, and as vice chairman of the federal Commission on Long-Term Care in 2013. He also held senior-level positions at the Federal Reserve Board and the IRS.

In the private sector, he has served as director of research at the TIAA-CREF Institute; director of retirement research at Towers Watson, a global human capital consulting firm; a senior research fellow at the Mercatus Center of George Washington University; and visiting scholar at MIT Golub Center for Finance and Policy, to name a few positions.

He’s had time to publish four books and more than 100 research papers so far, and he’s considering writing a book on both long-term care insurance and Social Security, he said.

Warshawsky’s proudest accomplishment in the public sector came in 2006, when he was instrumental in developing the Pension Protection Act of 2006.

“You can thank me that your pension is safe,” he said, although “no one ever has,” he added with a chuckle.

While he was at Social Security, Warshawsky and his staff streamlined the annual statement every American receives in the mail.

“We totally revamped and redesigned the Social Security statement…That statement had not been changed in 20 years. It was very wordy, a lot of bureaucratic mumbo jumbo.”

Now, he said, “It’s much cleaner; it’s not as long — thank goodness.”

Invented the life care annuity

Warshawsky is also credited with inventing the “life care annuity,” an insurance company product for people who can’t afford, or aren’t eligible for, long-term care insurance.

Although most people will require long-term care someday, they likely won’t be able to afford it. Medicare doesn’t pay for long-term care, so some people try to buy insurance to cover future expenses.

However, Warshawsky pointed out, “a lot of people can’t get long-term care insurance because their health is poor. Long-term care insurance (LTCI) is expensive to begin with. It’s unaffordable for most people.”

So Warshawsky hit upon the idea of combining long-term care insurance with life annuities.

“The people who buy LTCI are people who expect to use it, so they’re presumably sicker and more frail,” he explained. “By contrast, the people who buy life annuities expect to live forever. If you combine them, both groups come out ahead.”

“Everyone needs a life annuity in my mind because we never know how long we’re going to live. You could outlive your income,” he said.

After working as a financial consultant for years, Warshawsky struck out on his own and established a company to provide guidance about and offer the annuities he invented.

During the five years that he ran the business, he also developed a software program related to estate planning. The program, he said, addressed the question, “How do you optimize your portfolio to get a lifetime stream of income and leave a legacy to your grandchildren?”

What can average citizens do about Social Security’s problems? Although the looming insolvency won’t affect people in the Greatest Generation or perhaps even Boomers, younger generations may witness disaster.

“People need to understand it, they need to weigh in on it,” he said. “People should express their views to their congressman,” he recommends.

You can watch Warshawsky’s informational lecture from a computer, smartphone or tablet. Check out the Beacon’s free Virtual 50+Expo at beacon50expo.com from Nov. 1, 2021 through Jan. 31, 2022.