Retirement Risk Index Shows Modest Improvement

The percentage of working-age U.S. households who are “at risk” of being unable to maintain their pre-retirement standard of living in retirement fell from 52 percent to 50 percent between 2013 and 2016, according to the latest National Retirement Risk Index (NRRI) published by Boston College’s Center for Retirement Research.

“The bottom line is that half of today’s households will not have enough retirement income to maintain their pre-retirement standard of living, even if they work to age 65 and annuitize all their financial assets, including the receipts from a reverse mortgage on their homes,” according to an Issue Brief announcing the findings. “Retirement security remains a major challenge that requires today’s workers to save more and/or work longer.”

Improvement in the NRRI was driven mainly by rising home prices, with stock market gains also contributing. At the same time, Social Security’s rising “Full Retirement Age” and declining interest rates served as a headwind against greater progress.

Researchers construct the NRRI using the Federal Reserve’s 2016 Survey of Consumer Finances, a triennial survey that collects detailed information on household assets, liabilities, and demographic characteristics.