Can Americans Afford to Retire? New Evidence on Retirement Saving Adequacy

Traditional mechanisms that spread mortality and longevity risk across a population group are increasingly being replaced by saving vehicles that leave this obligation in the hands of individual households. We explore the question of whether households are adequately saving for their future retirement by reviewing recent literature that examines household behavior in preparing for retirement – both in the accumulation phase and the decumulation phase – and by exploring representative households on the verge of retirement. While the median married couple of approximately fifty-five years of age holds assets totaling nearly $400,000, they still must engage in substantial saving to retire comfortably at age sixty-two.