Over 40% of households could fall short in retirement - CRR

Unsurprisingly, the percentage of people deemed “at risk” by the CRR’s National Retirement Risk Index increased with each generation. While only 35% of ‘early bloomers’ (those born between 1946-1954) were at risk, the figure rose sharply in ‘late bloomers’ (1955-1964) to 44% and as high as 49% for ‘generation Xers (1965-1972).

And the CRR stressed its’ index used conservative assumptions and therefore might actually have “understated the size of the US retirement challenge”.

CRR director Alicia Munnell said the index results suggested many would struggle in retirement unless they changed their ways. But Munnell stressed ecen relatively modest adjustments, such as working two extra years or saving 3% more, could substantially improve retirement security.

The risk index was designed to project how much income households were expected to have in retirement relative to their pre-retirement income, and then compared that replacement rate to a target rate that would allow a household to maintain its pre-retirement standard of living.

Households that fell more than 10% short of the target are considered “at risk”.

By Damian Clarkson

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