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Is There Really a Retirement Savings Crisis? An NRRI Analysis

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Author Info
Alicia H. Munnell (Center for Retirement Research, Boston College)
Anthony Webb
Francesca Golub-Sass
Abstract

The National Retirement Risk Index (NRRI) has shown that even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, nearly 45 percent will be ‘at risk’ of being unable to maintain their standard of living in retirement. That is, these households are projected to have replacement rates — retirement income as a share of pre-retirement income — that fall more than 10 percent short of a target rate designed to maintain their pre-retirement living standard. More realistic assumptions regarding earlier retirement and reluctance to annuitize 401(k) balances or tap housing equity would put the percentage ‘at risk’ considerably higher, as would the inclusion of rapidly growing health care costs. Yet, recent academic articles and press stories question whether Americans are facing a retirement income crisis...

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Paper provided by Center for Retirement Research in its series Issues in Brief with number ib2007-7-11.

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Length: 9 pages
Date of creation: Aug 2007
Date of revision: Aug 2007
Handle: RePEc:crr:issbrf:ib2007-7-11

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Alicia H. Munnell & Francesca Golub-Sass & Andrew Varani, 2006. "How Much Are Workers Saving?," Issues in Brief ib34, Center for Retirement Research. [Downloadable!]
  2. Alicia H. Munnell & Francesca Golub-Sass & Anthony Webb, 2007. "What Moves the National Retirement Risk Index? A Look Back and an Update," Issues in Brief ib2007-7-1, Center for Retirement Research, revised Jan 2007. [Downloadable!]
  3. Robert Haveman & Karen Holden & Barbara Wolfe & Shane Sherlund, 2006. "Do Newly Retired Workers in the United States Have Sufficient Resources to Maintain Well-Being?," Economic Inquiry, Oxford University Press, vol. 44(2), pages 249-264, April. [Downloadable!] (restricted)
  4. B. Douglas Bernheim et al., 2000. "How Much Should Americans Be Saving for Retirement?," American Economic Review, American Economic Association, vol. 90(2), pages 288-292, May. [Downloadable!] (restricted)
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  5. James F. Moore & Olivia S. Mitchell, . "Projected Retirement Wealth and Saving Adequacy," Pension Research Council Working Papers 98-1, Wharton School Pension Research Council, University of Pennsylvania.
  6. JohnKarl Scholz & Ananth Seshadri, 2007. "Children and Household Wealth," Working Papers wp158, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
  7. Kotlikoff, Laurence J & Spivak, Avia & Summers, Lawrence H, 1982. "The Adequacy of Savings," American Economic Review, American Economic Association, vol. 72(5), pages 1056-69, December. [Downloadable!] (restricted)
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  8. David A. Love & Paul A. Smith & Lucy C. McNair, 2007. "Do households have enough wealth for retirement?," Finance and Economics Discussion Series 2007-17, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  9. John Karl Scholz & Ananth Seshadri & Surachai Khitatrakun, 2006. "Are Americans Saving "Optimally" for Retirement?," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 607-643, August. [Downloadable!] (restricted)
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  10. Alicia H. Munnell & Francesca Golub-Sass & Andrew Varani, 2005. "How Much Are Workers Saving?," Issues in Brief ib2005-34, Center for Retirement Research, revised Oct 2005. [Downloadable!]
  11. Jonathan Skinner, 2007. "Are You Sure You're Saving Enough for Retirement?," NBER Working Papers 12981, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dalen, H.P. van & Henkens, K. & Hershey, D.A., 2008. "Are Pension Savings sufficient? Perceptions and Expectations of American and Dutch Workers," Discussion Paper 2008-58, Tilburg University, Center for Economic Research. [Downloadable!]
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