Industry News

On May 9, 2023, the Center for Retirement Research (CRR) at Boston College released its issue brief, The National Retirement Risk Index: Version 2.0. As discussed in this brief, the National Retirement Risk Index (NRRI) measures the percent of U.S. working households at risk of being unable to maintain their pre-retirement standard of living throughout retirement. 

Since its inception, the NRRI methodology has been updated to enhance the projections of households’ wealth and replacement rates at retirement and estimations of the target replacement rates. The latest upgrades were intended to more accurately measure the retirement preparedness of working-age households and evaluate the impact of economic and policy factors on retirement security.

The NRRI compares the projected household replacement rates (i.e., projected household retirement income as a percentage of projected pre-retirement income) with the target replacement rates needed to maintain their living standard. Generally, the retooled NRRI confirms the earlier findings that 50% of households are unprepared for retirement and will not be able to maintain their pre-retirement standard of living.

The report concludes, “The robustness of the results confirms the retirement saving issue faced by today’s working age households, and that we need to fix our retirement system so that employer plan coverage is universal. Only with continuous coverage will workers be able to accumulate adequate resources to maintain their standard of living in retirement.”

The issue brief is available here.