A new study shows more Americans are running out of money in retirement. In the 2010 Employee Benefit Research Institute Retirement Readiness Rating, research showed dramatically more Americans are likely to run short of funds after one or two decades of retirement. Sixty-four percent of Americans in the two lowest income levels prior to retirement will be out of money after ten years of retirement, according to the study.
But perhaps more surprising is the fact that after 20 years of retirement, nearly a third of those in the next-to-highest income level will find their finances tapped. And one in ten of those in the highest income level will experience financial drain after 20 years in retirement. The study says Baby Boomers, on the brink of retirement, are at risk of running out of funds at some point during retirement. They may not be able to afford medical expenses and basic needs. “As the private-sector retirement plan system evolves from a largely paternalistic one to a system in which workers must make their own decisions, policymakers need to understand what percentage of the population is likely to fail to achieve retirement security under current conditions,” said Jack VanDerhei, principal author of the study, in a news release. “Even more important is to identify which of those households still have time to modify their behavior to achieve retirement security, and how they need to proceed. This analysis demonstrates that in ways we have not seen before.”
Tags: Retirement, Aging, Financial economics, Finance, Social Security, personal finance, Retirement spend down
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