All year I see studies and surveys estimating the percentage of people who don’t have enough money to retire, or at least retire the way they want. Lately, the focus has been to estimate the number who were pushed from the safe category to the at risk category by the financial crisis and decline in the value of housing and financial assets. Among the best of these studies is from the Economic Benefit Research Institute. It uses good data and goes beyond simple analysis. It also divides the population into early Boomers, late Boomers, and Gen-Xers, demonstrating that the retirement readiness varies the closer a group is to the traditional retirement age instead of lumping the population together.
EBRI found that the percentage of people at risk of not reaching retirement goals in each category was increased by the financial crisis, but not by as much as some other estimates. It also estimates the amount the at risk members of the early Boomers on average need to increase savings to get back on track.
Looking at all Early Boomer households that would need to save an
additional amount (over and above the savings already factored into the baseline model), the median
percentage of additional compensation for these households desiring a 90 percent probability of retirement
income adequacy would be 4.3 percent of compensation.
Here’s the bottom line finding:
In 2010, nearly one-half (47.2 percent) of the oldest cohort (Early Boomers) are simulated to be at risk of not having
sufficient retirement income to pay for “basic” retirement expenditures as well as uninsured health care costs.13 The
percentage at risk drops for the Late Boomers (to 43.7 percent) but then increases slightly for Generation Xers to
The paper has a lot of technical explanations of why its findings are different from other surveys. If you don’t mind that, it’s a good read.