A new Issue in Brief published by the Center for Retirement Research at Boston College this week examined whether households identified in the National Retirement Risk Index as being “at risk” recognize their situation.
According to the analysis, Do Households Have a Good Sense of Their Retirement Preparedness?, almost 60 percent of American households believe they are on track for retirement. But about 20 percent incorrectly think they are prepared, in large part because they do not recognize that their 401(k) savings are inadequate, according to the Issue in Brief’s authors.
These households are in the most danger of saving too little, but even those who know they are unprepared may not take action unless prodded. The National Retirement Risk Index (NRRI) measures the percentage of working-age households who are at risk of being financially unprepared for retirement.