Publications

Center for
Retirement Research
at Boston College
Hovey House
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Chestnut Hill
MA 02467-3808

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Briefs

Briefs offer concise and insightful analyses of topical issues.

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Is There Really a Retirement Savings Crisis? An NRRI Analysis

by Alicia H. Munnell, Anthony Webb, and Francesca Golub-Sass July 2007

IB#7-11

Introduction

The National Retirement Risk Index (NRRI) has shown that even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, nearly 45 percent will be ‘at risk’ of being unable to maintain their standard of living in retirement. That is, these households are projected to have replacement rates — retirement income as a share of pre-retirement income — that fall more than 10 percent short of a target rate designed to maintain their pre-retirement living standard. More realistic assumptions regarding earlier retirement and reluctance to annuitize 401(k) balances or tap housing equity would put the percentage ‘at risk’ considerably higher, as would the inclusion of rapidly growing health care costs. Yet, recent academic articles and press stories question whether Americans are facing a retirement income crisis...

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For more information on the NRRI

Alicia H. Munnell is the Director of the Center for Retirement Research at Boston College (CRR) and the Peter F. Drucker Professor of Management Sciences at Boston College’s Carroll School of Management. Anthony Webb is a research economist and Francesca Golub-Sass is a research associate at the CRR. The Center gratefully acknowledges Nationwide Mutual Insurance Company for its exclusive financial support of the National Retirement Risk Index (NRRI).