Eighty-eight percent of U.S. households will be ready to retire by age 70, compared with less than half at age 65, according to a brief from the Center for Retirement Research at Boston College.
The brief adapts the calculations of the center's National Retirement Risk Index, which measures the share of U.S. households at risk of being unable to maintain their lifestyles after retirement at age 65.
The index compares households' projected retirement income as a percentage of pre-retirement income with target rates that allow them to maintain their living standards.
While the index normally makes these calculations at age 65, the new analysis compares target dates between ages 50 and 90.
“I think there's a lot of a scary talk about how people will have to work forever. You hear stories about how people will never be able to retire and will have to work until (they are) 80 and the message (of the brief) is that a moderate increase in the average age of retirement will enable a lot of people who aren't on track to get back on track,” said Anthony Webb, research economist for the Center of Retirement Research and co-author of the brief.
“The main thing that is driving (working longer) is Social Security; that a household that postponed (Social Security) benefits from age 62 to age 70 increases benefits by 76% … is a lot of what's causing a lot of the increase in (retirement) preparedness … If you look at the age 62 number, then roughly 30% of people are maintaining a pre-retirement standard of living; by age 70, it's up to 88%,” Mr. Webb said.
The brief is available from the center's website.
