The National Retirement Income Adequacy Deficit: $4.6 Trillion
The total aggregate national deficit in U.S. retirement income adequacy is an estimated $4.6 trillion—or about $48,000 per-individual average, according to congressional testimony by the nonpartisan Employee Benefit Research Institute (EBRI).
Reflecting the importance of Social Security, the EBRI analysis finds that if Social Security retirement benefits were eliminated, the aggregate retirement income deficit would almost double, to $8.5 trillion, or an individual average of approximately $89,000.
“These numbers show that the national retirement income deficit—which is already quite large—would almost double without current-level Social Security benefits,” said Jack VanDerhei, EBRI research director, testifying at a hearing Oct. 7 by the Senate Committee on Health, Education, Labor and Pensions.
VanDerhei’s full testimony is online here. The press release is online here. The Senate HELP Committee’s website for the hearing is online here.
EBRI’s analysis is based on its unique Retirement Income Security Projection Model (RSPM®), which EBRI has developed since the late 1990s to estimate how much money Americans will need for “basic” expenses (food, shelter, etc.) and uninsured health care costs in retirement, and what financial resources they are likely to have at retirement age. Earlier this year, EBRI released its 2010 Retirement Readiness Rating,™ (online here) which showed the degree to which Baby Boomers and GenXers are likely to be “at risk” of running short of money in retirement.