The Impact of Interest Rates on the National Retirement Risk Index

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The brief’s key findings are:

  • The National Retirement Risk Index shows that changes in interest rates have only a modest effect on retirement preparedness for three reasons:
    • Most households have relatively little financial wealth to annuitize.
    • The effect on annuity income is muted, because the principal portion of the annuity payout is unaffected by interest rates.
    • Changes in the annuity income from a reverse mortgage are partly offset by changes in the amount that can be borrowed.