Following the global financial crisis, troubled retirement systems around the world face new challenges that may result in sharply reduced income for retirees -- as well as the possibility that younger workers will need to work much longer, according to Wharton insurance and risk management professor Olivia S. Mitchell.

In a recent paper titled, "Implications of the Financial Crisis for Long Run Retirement Security," Mitchell, who is director of Wharton's Pension Research Council, outlines a series of new risks to retirement stability, from inadequate individual retirement savings to broad global uncertainty, that have surfaced since the financial collapse. Current and future generations will not be able to rely on the "old fashioned" model of providing for retirement by saving during their working years, and must begin to think about new approaches to financing old age, she says. "It's ironic and sad that as we stand on the doorstep of global aging and the retirement of the baby boom [generation], the system we hoped would support us is looking very fragile."

Mitchell also serves as an associate director of the Financial Literacy Center, a research collaboration between Wharton, Dartmouth College, and the Rand Corp. Created in 2009 and supported by the U.S. Social Security Administration, the center is researching the roadblocks to financial literacy and gathering data on programs that work. (For a Knowledge@Wharton interview on financial literacy with Annamaria Lusardi, who will lead the new Center, and Michelle Greene, deputy assistant secretary for financial education and financial access at the U.S. Treasury Department, see: "Tackling Financial Illiteracy -- and the Costs that Go With It.")

Numerous government agencies and nonprofit organizations are working on the problem of financial illiteracy with Social Security officials, Mitchell notes. "Social Security feels that it must be the lead on this because it is the biggest government organization focused on the elderly and concerned with retirement security."