Changes to Household Retirement Savings Since 1989
By Andrew G. Biggs
This report uses two new data sources to provide insights on the evolution of retirement savings over the past three decades and how future retirees may fare. First, the Federal Reserve’s Survey of Consumer Finances and Distributional Financial Accounts (DFA) provide estimates of both household savings in retirement accounts and any benefits households accrued under a traditionally defined benefit pension. The DFA data show that, from 1989 through 2016, household retirement savings increased for every age, income, race, or educational group. This is true whether retirement savings are measured in inflation-adjusted dollars or as the ratio of retirement savings to their annual earnings. Second, I present previously unpublished projections from the Social Security Administration’s Model of Income in the Near Term (MINT). The MINT model projects that future retirees will have retirement incomes as a percentage of pre-retirement earnings similar to those of current retirees.
Source: SSRN
