A New National Retirement Risk Index

Americans weaned on post-war affluence have come to expect an extended period of leisure at the end of their work life. And, indeed, the majority of today s retirees are able to afford a decent retirement. However, this group is living in a golden age that will fade as Baby Boomers and Generation Xers reach traditional retirement ages in the coming decades. This gloomy prediction reflects the trend towards longer retirements and likely declines in retirement incomes relative to pre-retirement earnings known as replacement rates. Because many Americans appear unaware of these disquieting trends, the Center for Retirement Research at Boston College has developed the National Retirement Risk Index. The Index measures the share of working-age households who are at risk of being unable to maintain their pre-retirement standard of living in retirement.