This paper presents updated estimates of Americans" financial preparedness for retirement, based on a planning software simulation algorithm and data from the 1998 Survey of Consumer Finances. Using the 1998 data, the author finds that for 44.5% of middle-income American households, the algorithm predicts that assets and planned saving are insufficient to fully fund retirement. This represents a decrease of 4.0 percentage points in the retirement saving "failure rate" when compared to estimates derived from 1995 data. Improvements occurred across all demographic groups examined; however, the greatest improvements were among the wealthiest and most highly educated members of the population.
Click here for a summary article on this research study entitled "Estimating Retirement Preparedness with Planning Software." This article appeared in the Winter 2002 issue of Quarterly, a TIAA-CREF Institute publication.
