Summing Up the Retirement Crisis

May 27, 2014 at 8:44 PM

Is there a retirement crisis for baby boomers and Gen Xers? “It depends!” says Jack VanDerhei, research director with the Employee Benefit Research Institute in Washington, D.C.  The probability of NOT running short of money in retirement ranges from a low of 17% to a high of 99% depending on three main factors: your pre-retirement income level, what percent of expenses you aim to cover, and whether or not you factor long-term care and home health costs into the picture. For Gen Xers, the number of years of future eligibility in a 401(k) plan also plays a huge role.

VanDerhei summed up 10 years of research on retirement readiness on two Power Point slides reproduced below that he presented at EBRI’s 2014 annualpolicy forum. While policy experts and members of Congress are struggling to define the retirement crisis and hashing out proposals to fix it, the bottom line is that your retirement is in your hands.

The good news is many Americans can do something about it: spend less, save more (maximize your workplace retirement plan if you have one, open up an Individual Retirement Account if you don’t), and plan for long-term care expenses.

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Source: Forbes - Ashlea Ebeling

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