Are Retirees Falling Short? Reconciling the Conflicting Evidence

Munnell, Alicia H.; Rutledge, Matthew S.; Webb, Anthony

doi:10.2139/ssrn.2522967

Cited by 6 publications

(5 citation statements)

References 20 publications

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“…The uniqueness of this study's contribution is the measurement of social factors that may shape an individual's preparedness for retirement. Never has the importance of saving for retirement become more relevant, as literature shows that households retiring in the future will be less prepared than those in the past (Munnell, Rutledge, and Webb, 2014). Thus, this study aims to use the net replacement ratio as its variable of interest.…”

Section: Preservation Of Fundsmentioning

confidence: 99%

“…As women have longer life expectancies than men (71.5 years vs. 64.5 years; Statistics South Africa, 2018b), their smaller accumulated savings need to be stretched over a longer period. Marital status also has a role to play in this regard: Married individuals have the greatest life expectancy, and single men the shortest (Munnell et al, 2014). However, marriage can be viewed as a source of financial security for women, with joint accumulation of savings.…”

Section: Social Factors That Shape Preparedness For Retirementmentioning

confidence: 99%

“…Similarly, women earn lower annuities than men as they have a longer life expectancy upon retirement (Munnell et al, 2014). This contributes to the economic vulnerability that women face in addition to their credit constraints (Fletschner & Kenney, 2011) and the need to leave the workforce when having children which limits their income earning potential (Ginn, 2004).…”

Section: Conclusion and Recommendationsmentioning

confidence: 99%

“…This is because the annuity is paid for a longer period of time over the surviving spouse's lifespan, not only the main member's (Butler, 2011). Similarly, women earn lower annuities than men as they have a longer life expectancy upon retirement (Munnell et al, 2014).…”

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confidence: 99%

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South African individual retirement savings: An analysis of the social factors

Willows

2019

Risk Manage Insurance Review

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This study's primary aim is to determine whether members of a South African tertiary institution's retirement fund are en route to have sufficient retirement savings. Secondly, the results are analysed between different social factors namely: age, gender, race, education level, marital status, and cost of employment. Survey data and information received directly from the retirement fund were used as inputs in a customised model. This method was unique to this study, that is, it was able to consider broader circumstances other than the member's retirement savings within the fund only. Among the sample of 753 respondents, one‐third of respondents will have insufficient retirement savings and <10% will have enough. Single, younger and male respondents are most likely to have sufficient retirement savings and this is suggested to be as a result of advantageous annuity rates upon retirement. Black/African respondents were least likely to have sufficient retirement savings. Notwithstanding the racial population divide following apartheid, societal and cultural explanations speak to a culture of increased spending coupled with high financial dependency relationships. Thus, the findings provide rich information which necessitates policies which address leakage from retirement savings, appropriate defaults, and the availability of innovative and affordable savings vehicles.

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Section: Preservation Of Fundsmentioning

confidence: 99%

Section: Social Factors That Shape Preparedness For Retirementmentioning

confidence: 99%

Section: Conclusion and Recommendationsmentioning

confidence: 99%

mentioning

confidence: 99%

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South African individual retirement savings: An analysis of the social factors

Willows

2019

Risk Manage Insurance Review

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“…Three broad strategies have been used by researchers to estimate the fraction of households that have not saved adequately for their retirement. Munnell, Rutledge, and Webb (2014) explore the extent to which differences in the results from the different approaches can be attributed to differences in the assumptions that are made in implementing them, or to inherent differences in their depiction of retirement saving adequacy. Different assumptions appear to be the key driver of these differences.…”

Section: Assessing Retirement Securitymentioning

confidence: 99%

Saver Heterogeneity and the Challenge of Assessing Retirement Saving Adequacy

Poterba¹

2015

National Tax Journal

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The members of every household confront the question of whether they are saving enough for retirement. Some who have saved enough ex ante to have covered most, but not all, contingencies may wish that they had saved more, while others may discover that their retirement resources are more than sufficient to support their lifestyle. There are unpredictable expenditure needs in retirement, and households cannot insure against all of them. The challenge facing individual households arises more generally when researchers and public policy analysts attempt to evaluate the adequacy of retirement preparation by various age cohorts in the U.S. population. Whether the "Baby Boom" generation has saved enough to provide for a secure retirement is a frequent topic of both scholarly and popular debate. There are many studies of retirement saving adequacy, and their results bear directly on tax and regulatory policy debates surrounding the design of retirement saving vehicles such as Individual Retirement Accounts, 401(k) plans, and 403(b) plans. They also feature in discussions of the changing role and nature of defined benefit pension plans, and of the current and future role of Social Security in supporting older households.Despite a voluminous research literature on saving behavior and retirement planning, whether U.S. households are saving enough for retirement remains controversial. In part, this is because of the heterogeneity of household circumstances. It is difficult to make general statements about the retirement preparation of an entire age cohort when earnings trajectories, wealth holdings, future health status and associated medical spending needs, and preferences regarding retirement consumption vary widely. This paper highlights a number of dimensions of household heterogeneity that bear on assessments of retirement saving adequacy. It then describes several metrics for judging retirement saving adequacy. Twelve Questions for Retirement SaversTo illustrate the role of heterogeneity in circumstances and preferences that bear on the design of a retirement saving program, consider the information that a married couple in their mid-50s would need to evaluate when determining how much they need to save for retirement. There are at least a dozen questions that can significantly affect the appropriate level of retirement saving. Many of them can only be answered with probability distributions. This makes it challenging for many households to develop meaningful answers to these questions, and it complicates the formulation of a retirement saving plan. I describe these questions, and comment on the heterogeneity across households that each highlights.(i) How long are we likely to live? In addition to considering current information on life expectancy in the population as a whole, a married couple needs to consider their current health status, and the substantial differences in life expectancy that are associated with socio-economic status. Uncertainty about length of life is one of the most important risks facing an old...

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Worldwide Diversity in Funded Pension Plans: Four Role Models on Choice and Participation

Huitron

Ponds²

2015

SSRN Journal

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Are Retirees Falling Short? Reconciling the Conflicting Evidence

Cited by 6 publications

References 20 publications

South African individual retirement savings: An analysis of the social factors

South African individual retirement savings: An analysis of the social factors

Saver Heterogeneity and the Challenge of Assessing Retirement Saving Adequacy

Worldwide Diversity in Funded Pension Plans: Four Role Models on Choice and Participation

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