EBRI Retirement Study—Jack Vanderhei
Wednesday, October 6, 2010 at 03:18PM With Americans living longer in retirement, the 2010 EBRI Retirement Readiness Rating™ released today shows dramatically high percentages of Americans - even in the upper-income categories - are likely to run short of money after 10 or 20 years of retirement.
The new analysis by the nonpartisan Employee Benefit Research Institute (EBRI) finds that almost two-thirds (64 percent) of Americans in the two lowest preretirement income levels will be running short after 10 years in retirement.
However, the EBRI study also finds that after 20 years of retirement, almost a third (29 percent) of those in the next-to-highest income level will run short of money, as will more than 1 in 10 (13 per-cent) of those in the highest-income level. Not surprisingly, those with the highest income are at the lowest risk of running short of money - but many in the highest income category still face significant risks of not being able to pay basic expenses and uninsured medical expenses for the remainder of their lives.
The EBRI Retirement Readiness Rating™ is based on EBRI's Retirement Security Projection Model® (RSPM), which the institute first used in 2003 to evaluate national retirement income adequacy. The newest version of the model factors in many new retirement plan changes, such as auto-enrollment and auto-escalation of contributions in 401(k) plans, as well as updates for financial market performance and employee behavior (based on a database of 24 million 401(k) participants.
