Retirement readiness

In its July Issue Brief, the Employee Benefit Research Institute (EBRI) discusses the adequacy of retirement preparation, specifically the issue of retirees "at risk" of inadequate retirement income. The study uses two assessment models EBRI developed--the Retirement Security Projection Model (RSPM) and the Retirement Readiness Rating--and examines:

• Modeling retirement income adequacy
• "At risk" levels, by age and income
• Future eligibility in a defined contribution plan
• Running short of money
• Additional savings needed

EBRI divides the "at risk" population into three age cohorts: Early Boomers (born between 1948–1954, now ages 56–62); Late Boomers (born between 1955–1964, now ages 46–55), and Generation Xers (born between 1965–1974, now ages 36–45). Among the paper's conclusions:

The baseline 2010 Retirement Readiness Rating finds that nearly one-half (47.2 percent) of the oldest cohort (Early Baby Boomers) are simulated to be “at risk” of not having sufficient retirement resources to pay for "basic" retirement expenditures as well as uninsured health care costs. The percentage "at risk" drops for the Late Boomers (to 43.7 percent) but then increases slightly for Generation Xers to 44.5 percent.

The EBRI Retirement Readiness Rating: Retirement Income Preparation and Future Prospects, July 2010
      Issue Brief (pdf, 36pp/748kB)
      Executive Summary