Are all Americans saving 'optimally' for retirement?

TitleAre all Americans saving 'optimally' for retirement?
Publication TypeReport
Year of Publication2009
AuthorsGale, WG, Scholz, JKarl, Seshadri, A
Series TitleMichigan Retirement Research Center Research Paper
Document NumberNo. 2008-189
InstitutionMichigan Retirement Research Center, University of Michigan
CityAnn Arbor, MI
KeywordsConsumption and Savings, Restricted data, Retirement Planning and Satisfaction

Many people fear that Americans are preparing poorly for retirement. But developing rigorous evidence on this issue is difficult. In this paper we briefly discuss evidence on the adequacy of retirement wealth accumulation. We conclude that existing descriptive evidence does not seem consistent with dire assessments of poor financial preparation. We then extend the straightforward, but computationally complex dynamic programming approach used in our earlier work to assess the adequacy of retirement wealth preparation of Americans born before 1954. We find only 4 percent of HRS households have net worth below their optimal targets in 2004, though this percentage is somewhat higher for more recent HRS cohorts. While our work is preliminary, we find little evidence that Americans born before 1954 have prepared poorly for retirement.

Endnote Keywords

savings/retirement planning

Endnote ID


Citation Key5768