In much of the world, retiring is riskier than it's been since the modern welfare state began to emerge, in the late 19th century. Over the past two decades, the level of retirement-related risk has increased as employers shifted from defined-benefit to defined-contribution retirement plans, life expectancies increased, and health care costs rose. Now, looming public-pension crises mean that many people must plan for retirement without knowing how much support the state will provide.

But help may be on the way in the form of the intense competition emerging among banks, insurance companies, mutual funds, and traditional brokerage houses. As these institutions target the retirement market, innovative, risk-mitigating products and services may start to appear. Not that financial-services breakthroughs, should they occur, will solve all of modern society's retirement ills: those who lack the income or the will to start saving early will still experience financial difficulty later in life. Nor can financial institutions reverse the declining ratio of workers to retirees and its implications for the solvency of public pensions, the pace of capital formation, and economic growth (see "The demographic deficit: How aging will reduce global wealth" and "Can pension plans age gracefully?").

But...