IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

2010 SCF Suggests Even Greater Retirement Risks

Listed author(s):
  • Alicia H. Munnell

People often ask how baby boomers compare with their parents in terms of being prepared for retirement. The easiest way to answer that question is to look at the ratio of wealth to income from the 2010 Survey of Consumer Finances (SCF), the Federal Reserve’s comprehensive triennial survey of household wealth in the United States, and compare it to earlier surveys. The notion is that the wealth-to-income ratio is a good proxy for the extent to which people can replace their pre-retirement earnings in retirement. This brief proceeds as follows. The first section shows the wealth-to-income ratio for each SCF survey from 1983 through 2010. The ratio in 2010, in the wake of the financial crisis and ensuing recession, was way below that for all the other survey years. The second section identifies four reasons why people need a higher wealth-to-income ratio to be as well off as their parents – increased life expectancy, the shift to 401(k)s, higher health care costs, and lower real interest rates. The third section concludes that the constant ratio of wealth to income between 1983 and 2007 should never have been a source of comfort. The world has changed in important ways that all require more wealth to sustain living standards in retirement. Thus, the sharp decline in the wealth-toincome ratio reported in the 2010 SCF signals even more serious problems for future retirees.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Center for Retirement Research in its series Issues in Brief with number ib2012-15.

in new window

Length: 6 pages
Date of creation: Aug 2012
Date of revision: Aug 2012
Handle: RePEc:crr:issbrf:ib2012-15
Contact details of provider: Postal:
Hovey House, 140 Commonwealth Avenue, Chestnut Hill, MA 02467

Phone: (617) 552-1762
Fax: (617) 552-0191
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:crr:issbrf:ib2012-15. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Grzybowski)

or (Christopher F Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.