Approximately half of all U.S. households are at risk of being unable to maintain their pre-retirement standard of living once they reach retirement, even if they work until the age of 65, according to the National Retirement Risk Index (NRRI) published this week by the Boston College Center for Retirement Research (CRR).

By incorporating new research findings and methodological advances into the data, the newest version of the NRRI “can more accurately measure the retirement preparedness of working-age households and evaluate the impact of economic and policy factors on retirement security,” according to the researchers.

Even after recalculating several pieces of data under the NRRI’s latest guidelines, the severity of the potential risk for households has not diminished when compared with previous NRRI releases, the researchers said. While the raw percentage of at-risk households declined slightly compared with data from 2010, the risk was most severe among the oldest cohort of pre-retirees between the ages of 50 and 59.

Some events impacted different levels of household income indiscriminately, particularly the financial crisis and its following Great Recession, the data said.

“The middle and the highest thirds saw significant improvement from 2010-2019 due to rebounding housing and equity prices,” the data said. “In contrast, households in the bottom third saw virtually no improvement as they are less likely to own a house and participate in [defined contribution] plans, and have few financial assets.”

When viewed by wealth group, the level of retirement preparedness indicated similar patterns. However, there was a clear difference in the top and bottom groups in this cohort.

“The discrepancy between the top and bottom wealth groups, though, is much larger than those by income, reflecting the fact that wealth inequality is more severe than income inequality,” the data said.

So, even after recalculation based on updated methodologies, the core idea regarding retirement preparedness has managed to hold true. Critically, that applies even when including a reverse mortgage in the situation.

“[A]bout half of today’s households will not have enough retirement income to maintain their pre-retirement standard of living, even if they work to age 65 and annuitize all their financial assets, including the receipts from a reverse mortgage on their homes,” the NRRI said. “The robustness of the results confirms the retirement saving issue faced by today’s working-age households, and that we need to fix our retirement system so that employer plan coverage is universal.”



Continuous coverage is the only way workers will be able to accumulate an adequate level of resources to maintain the standard of living they’ve grown accustomed to before retiring, the NRRI concludes.