Mortgage News May 24, 2023
According to the latest report from the Boston College Center for Retirement Research (CRR), about 50% of American households face a potential inability to maintain their desired lifestyle after retiring, even if they continue working until the age of 65. This finding is based on the National Retirement Risk Index (NRRI).
The researchers state that by integrating recent research discoveries and methodological improvements, the latest iteration of the NRRI can provide a more precise assessment of the retirement readiness of households of working age. Furthermore, it enables the evaluation of how economic and policy factors affect retirement security.
Despite recalculating multiple data points using the updated guidelines of the NRRI, the researchers confirm that the level of potential risk for households remains unchanged when compared to previous releases of the index. Although there was a slight decrease in the raw percentage of households at risk since 2010, the researchers highlight that the risk is particularly significant for the oldest group of pre-retirees aged 50 to 59.
The data reveals that certain events, such as the financial crisis and subsequent Great Recession, affected household incomes across different levels without discrimination.
When examining retirement preparedness based on wealth groups, similar trends were observed. However, significant disparities were evident between the top and bottom groups within this cohort.
Therefore, even after recalculating the data using improved methodologies, the fundamental concept of retirement preparedness remains consistent. Importantly, this holds true even when considering the inclusion of a reverse mortgage as part of the scenario.
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