How Much Are Workers Saving?
IB#34
Introduction
It is crucial that today's workers save for retirement for two reasons. First, Social Security replacement rates will decline due to increases in the Normal Retirement Age, rising premiums for Medicare, more personal income taxation, and potential adjustments to restore financial balance to the system. Second, accumulations in 401(k) plans may well be much lower than people anticipate. As such, personal saving will become increasingly necessary for retirement security...
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Alicia H. Munnell is the Peter F. Drucker Professor of Management Sciences in Boston College's Carroll School of Management and Director of the Center for Retirement Research (CRR) at Boston College. Francesca Golub-Sass is a research associate at the CRR. Andrew Varani is an undergraduate research assistant at the CRR. The authors would like to thank Gary Burtless for helpful comments. This brief is adapted from a paper by the same authors (Munnell, et al. 2005 forthcoming).