The Center For Retirement Research at Boston College continues to do an excellent job of elevating concerns about the current state of the “average” American worker and their ability to survive, if not thrive, in retirement.  In their most recent brief, titled “How Much Income Do Retirees Actually Have?” they set out to determine what percentage of Americans will fall short of the goal to have 75% of pre-retirement income available on a yearly basis. The paper looks at 4 different measures of pre-retirement income, including final-year average, last 5-years, CPI career-average, and AWI career-average (AWI is average-wage-index career average earnings).

Whatever measure is used to determine financial solvency (preparedness), we are struggling as a nation, as each of these measures indicate that at least 42% (final-year average) of our population will fall short of their income target in retirement, with three of these measures indicating that from 52% to 60% of workers will not save enough. Wow!

Importantly, this report also set out to determine if the data sources truly capture the current state of affairs or are they underestimating how much has been set aside. Through their analysis, they are comfortable that 4 of the 5 primary sources of retirement income are doing a very good job, which is unfortunate since the data support the notion that there is a retirement crisis unfolding. The only source that falls short is the Current Population Survey, which has been reported previously.