Retirement Income Adequacy for Boomers and Gen Xers: Evidence from the 2012 EBRI Retirement Security Projection Model®
Measuring retirement security -- or retirement income adequacy -- is an extremely important topic. EBRI launched a major project to provide this type of measurement in the late 1990s for several states concerned whether their residents would have sufficient income when they reached retirement age. After conducting studies for Oregon, Kansas, and Massachusetts, a national model -- the EBRI Retirement Security Projection Model® (RSPM) -- was developed in 2003, and in 2010 it was updated to incorporate several significant changes, including the impacts of defined benefit plan freezes, automatic enrollment provisions for 401(k) plans, and the recent crises in the financial and housing markets. EBRI has recently updated RSPM for changes in financial and real estate market conditions as well as underlying demographic changes and changes in 401(k) participant behavior since January 1, 2010 (based on a database of 23 million 401(k) participants). This paper provides updates for the previously published EBRI Retirement Readiness Ratings™ as well as the Retirement Savings Shortfalls. EBRI’s updated 2012 Retirement Security Projection Model® finds that for Early Baby Boomers (individuals born between 1948-1954), Late Baby Boomers (born between 1955-1964) and Generation Xers (born between 1965-1974), roughly 44 percent of the simulated lifepaths were projected to lack adequate retirement income for basic retirement expenses plus uninsured health care costs. These “at-risk” levels are some 5-8 percentage points LOWER than what was found in 2003, largely due to the growing adoption of automatic enrollment by 401(k) plan sponsors. Eligibility for a workplace defined contribution retirement plan has a significant positive impact on “at-risk” levels. The aggregate retirement income deficit number, taking into account current Social Security retirement benefits and the assumption that net housing equity is utilized “as needed,” is currently estimated to be $4.3 trillion for all Baby Boomers and Gen Xers. The PDF for the above title, published in the May 2012 issue of EBRI Notes, also contains the fulltext of another May 2012 EBRI Notes article abstracted on SSRN: “Trends in Employment-Based Coverage Among Workers, and Access to Coverage Among Uninsured Workers, 1995-2011.”
Retirement Savings Shortfalls: Evidence from EBRI's Retirement Security Projection Model®
EBRI previously published extensive analysis that focused on the EBRI Retirement Readiness Ratings™ -- the probability that households will not run short of money in retirement. This paper expands the earlier analysis by providing similar analysis of the EBRI Retirement Savings Shortfalls (RSS) -- the size of the deficits that households are simulated to generate in retirement. The Retirement Savings Shortfalls show that for those on the verge of retirement (Early Baby Boomers), the deficits vary from $19,304 (per individual) for married households, increasing to $33,778 for single males and $62,734 for single females. While these RSS values may appear to be relatively small considering they represent the sum of present values that may include decades of deficits, it is important to remember that less than half of the simulated lifepaths modeled are considered to be “at risk.” Looking only at those situations where shortfalls are projected shows that the values for Early Boomers vary from $71,299 (per individual) for married households, increasing to $93,576 for single males and $104,821 for single females. RSS values are much smaller for Gen Xers with significant years of future eligibility for defined contribution plan participation. The deficit values for Gen Xers assumed to have no future years of eligibility (as if they were never simulated to be employed in the future by an organization that provides access to those plans) is $78,297 per individual. That shortfall decreases substantially (to $52,113) for those with one to nine years of future eligibility, and even further to $32,937 for those with 10-19 years of future eligibility. The results also demonstrate the extreme importance of longevity risk and nursing home and home health care costs in simulating Retirement Savings Shortfalls. Ignoring nursing home and home health care costs (or assuming another entity pays these costs) decreases the RSS by an average of 74 percent whereas the RSS for those in the latest relative longevity quartile average 14.8 times those in the earliest relative longevity quartile. The impact of Social Security retirement benefits on RSS was demonstrated in two ways. A pro rata decrease of between 22 and 27 percent starting in 2033 would increase RSS by an average of 15 percent for Gen Xers. If all Social Security retirement benefits were eliminated in 2015, the average RSS (for Boomers and Gen Xers) would increase by 90 percent. The aggregate national retirement deficit number is currently estimated to be $4.13 trillion for all U.S. households where the head of the household is between 25 and 64, inclusive.
Barbarians, Gentlemen and Players : A Sociological Study of the Development of Rugby Football
Part I: Folk Antecedents and Transitional Forms of Football in the Public Schools 1. The folk antecedents of modern rugby and their decline 2. Football in the early 19th century public schools Part II: The Modernisation of Rugby Football 3. The preconditions for modernization: embourgeoisement and public school reform 4. The incipient modernization of rugby football 5. The 'civilising process' and the formation of the RFU. 6. The democratization of rugby football. 7. Professionalisation and the amateur response. 8. The split. 9. The class structure and the professionalisation of British sport. Part III: The Development of Rugby Football as a Modern Sport 10. The professionalisation of rugby league. 11. Rugby union as a modern sport: bureaucracy, gate-taking clubs and the swansong of amateurism. Conclusion: Sociological Reflections on the Crisis in Modern Sport