More households are at risk of being unable to maintain their standard of living during retirement, according to the Center for Retirement Research at Boston College. The center last week updated its National Retirement Risk Index, a measurement of retirement readiness that evaluates American households’ financial assets, housing and changes in Social Security benefits.
The latest index shows that 51% of Americans aren’t prepared to retire at 65, up from 44% in 2007.
This estimate doesn’t consider the cost of health care or long-term care. If those were included, 70% of the population wouldn’t be prepared to retire.
It is clear that a great many people will see their standard of living decline in retirement. However, the optimist will look at this and correctly say that 49% (or 30% if health care or long-term care are considered) are prepared. There is nothing complicated about the conclusion that should be drawn from this study: Save and invest wisely or else plan to get used to a very different quality of life that was enjoyed during your working years.
