Are Your Retirement Plans "At Risk"?

Americans are getting a lot of advice these days from financial planners and other experts on the best strategy to insure a safe retirement. Whether one chooses TRS or ORP, for instance, does not answer completely some fundamental questions: How much is enough? What are my long term needs? What are the hazards?

Getting objective advice is sometimes problematic. One of the best regarded sources for accurate, impartial information is the non-profit Center for Retirement Research at Boston College. The group has formulated something called the The National Retirement Risk Index (NRRI), which measures the percentage of working-age households who are ‘at risk’ of being financially unprepared for retirement today and in coming decades.

Their calculations show that, even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, 44 percent will be ‘at risk’ of being unable to maintain their standard of living in retirement.

A new study from the organization, titled "Do Households Have a Good Sense of Their Retirement Preparedness?" gets into the details of such concerns in an understandable and objective fashion.

Do people ‘at risk’ know that they are ‘at risk?’ The first section summarizes the NRRI and compares households’ self-assessed preparedness to the objective measure provided by the NRRI. The second section describes the characteristics of households associated with being too optimistic or too pessimistic. The last section introduces health care costs into the analysis.

Here's the home page of the Center for Retirement Research, which also contains a wealth of information.

Comments

[Larry Webster]

This is a serious topic, and one which many educators are not well versed in. Too many educators think the retirement system will be adequate, but it just won't be. If you would like more information on how to use private retirement benefit planning, send an email to ljwebster@austin.rr.com and I can help you.