The Sufficiency of Retirement Savings: Comparing Cohorts at the Time of Retirement

Assessing savings sufficiency requires detailed information on both potential retirement benefits and the characteristics of a national sample of older citizens. This chapter uses the Health and Retirement Survey and the New Beneficiary Survey linked to administrative records to assess and compare the saving adequacy of two different cohorts. Specifically we compare the two groups in terms of their annuitized net wealth (ANW) and ANW relative to the poverty line, as well as the near-poverty line. We find that the mean wealth levels of both new retiree cohorts rose over time (by about two-thirds for wealth and by half for ANW), but the chance of meeting social adequacy targets has also risen. This shortfall we believe is concentrated increasingly among nonmarried persons, and those with low human capital and labor force attachment. In other words, vulnerability during the working life appears to persist into retirement.