Planning for Retirement: From Awareness to Wellness
Households increasingly face greater responsibility for their own retirement security. Fewer households will receive guaranteed lifetime income from traditional pension plans, and employer-sponsored retiree healthcare coverage is becoming far less common. Increases in Social Security’s Full Retirement Age are being phased in, resulting in a reduction in these benefits as well. In light of these trends, it is critical for households to regularly assess their retirement preparedness and take action to stay on track, if needed.
The National Retirement Risk Index (NRRI), published by the Center for Retirement Research (CRR) at Boston College, measures the percentage of working-age households at risk of being unable to maintain their pre-retirement standard of living during retirement. Based on data gleaned from the Survey of Consumer Finances and leveraging the NRRI, the latest CRR research analyzes how well households are self-assessing their retirement preparedness.
The CRR’s findings indicate that 57 percent of households self-assess their retirement preparedness accurately – their assessment is consistent with the NRRI assessment. More specifically, 33 percent of households believe that they are “at risk” of being unable to maintain their standard of living in retirement, and are also deemed by the NRRI to be “at risk”. Similarly, 24 percent of households believe they are “not at risk”, and the NRRI also deems them “not at risk”.
Conversely, 43 percent of households’ self-assessment conflicts with the NRRI assessment. Nineteen percent indicate that they are “not at risk”, while the NRRI indicates that they are. The other 24 percent believe they are “at risk”, while the NRRI indicates that they are not.
- Download Planning for Retirement: From Awareness to Wellness to find out more.
- Read the CRR Issue Brief, Do Households Have a Good Sense of Their Retirement Preparedness?
Prudential is the exclusive sponsor of the National Retirement Risk Index.