three-legged stool

The three-legged stool is a metaphor for retirement security supported by three sources: Social Security, private pensions, and personal savings and investments. In the book, it provides a way to measure the distance between the promise of a stable retirement and the economic reality facing older workers. As two of its supports weaken, the image of a sturdy tripod gives way to a much less secure arrangement: Social Security carrying more of the burden while people keep working to make ends meet.

The model and its changing supports

After the New Deal, economists described American retirement finance as a three-legged stool. Social Security supplied one leg; employer pensions supplied another; savings and investments made up the third. The metaphor conveys the model’s basic premise: security rests on several supports rather than on any single source of income.

The book traces the weakening of that structure to changes in both household finances and employer benefits. Many people lost assets in the Great Recession, while saving had already declined. Since the 1980s, employers have increasingly replaced defined-benefit pensions—which promise a regular payment—with 401(k) plans that depend more heavily on employee contributions and investment outcomes. A 401(k) may be depleted during a retiree’s lifetime, and it costs employers less than a traditional pension. The shift also transfers more economic risk from shared institutions to individual families.

From tripod to precarious footing

The metaphor’s force comes from the contrast between its apparent sturdiness and the retirement system the book describes. Social Security has become the largest single source of income for most Americans aged sixty-five and older, but the book presents it as inadequate to replace the supports lost elsewhere. Economist Peter Brady’s alternative image is a pogo stick: instead of a balanced structure, retirees may be left depending on a single, unstable source.

The consequences appear in the growing number of older people who remain in the labor force. Nearly nine million Americans aged sixty-five and older were employed in 2016, a 60 percent increase over the preceding decade. The book notes expectations that this figure and the share of seniors working would continue to rise. Although most older Americans still regarded retirement as a period of leisure, only 17 percent anticipated that they would not work at all in later life. The three-legged stool thus names not only a policy arrangement but also a changing life course: work increasingly continues into old age because retirement income may not suffice.

Work after retirement age

David Roderick’s experience makes the transfer of risk concrete. A seventy-seven-year-old workamper, he had once taught chemistry and oceanography at California community colleges. During an earlier divorce, he had to cash out a pension built over sixteen years of teaching. With the state’s matching contribution, it might have grown to at least $500,000; instead, the $22,000 available at the time was divided between him and his first wife. In later life, he and his second wife—who had also lost a substantial annuity after the 1991 collapse of Executive Life—worked seasonal jobs.

One such job required Roderick to carry Christmas trees as tall as nine feet and lift them onto customers’ vehicles for eight to ten hours a day, six days a week. He valued the selling but described the cutting and hauling as work better suited to a much younger person. His account links the thinning of retirement resources to the physical demands of the jobs available to older people: continuing employment is not necessarily a chosen extension of leisure, and a paycheck may come at the cost of strenuous labor.

Other older workers in the book show the breadth of the trend. Some had lost homes or financial security after economic downturns; others relied on seasonal workamping. At Adventureland, employees included an eighty-one-year-old ride operator and older staff members working in varied roles. Their capacity to work is evident, but the examples do not undo the underlying insecurity: individual stamina and willingness cannot replace reliable retirement supports.

The household beyond the metaphor

The stool also draws attention to what its three formal legs leave out. When income, health, or housing fails, families may become an informal source of support, although relatives can be under pressure themselves. Linda May, stranded on her daughter Audra’s couch while her Jeep was being repaired, missed the autonomy of having a home of her own. Health problems in the household—including Audra’s arthritis and Collin’s migraines and vertigo—made the family’s emotional and financial situation more difficult.

That support proved material as well as emotional when the family faced eviction. After Collin lost the short-term disability benefits he had received, Linda gave the family her stored twenty-eight-foot motorhome. Two adults, three teenagers, and four dogs would have to share it. Their circumstances show how housing and income crises can be absorbed within family relationships, but not resolved by them. In the book’s wider argument, the image of the three-legged stool is therefore a measure of institutional retreat as well as personal hardship: as formal supports falter, the burden shifts onto older workers, households, and improvised arrangements.