1. Comments on “How Accurate are Expected Retirement Savings?”
Peter R. Orszag
Retirement Security Project and Brookings
August 2005
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2. Results
Those near retirement are willing to answer a question about projected assets at retirement
The responses contain useful information about actual retirement saving, even beyond that contained in accumulated saving at the time of the question
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3. Limitations
Results limited to those roughly 5-10 years from retirement
Results exclude retirement saving accounts (IRAs, 401ks, etc.), raising questions about the title
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4. Source: Analysis of public use data from 2004 SCF. Data for those 65+
“Retirement saving” but retirement saving assets are excluded (as is home equity and debts)….
Non-retirement financial assets
Net worth
25th
$ ,200
$ ,480
Median
$ ,000
$ ,900
75th
$ ,500
$ ,600
Mean
$ ,097
$ ,162
Source: Analysis of public use data from 2004 SCF. Data for those 65+
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5. Source: Analysis of public use data from 2004 SCF. Data for those 65+
Another look….
Non-retirement financial assets/
net worth
25th
4.1%
Median
17.3%
75th
44.2%
Mean
27.5%
Source: Analysis of public use data from 2004 SCF. Data for those 65+
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6. Broader policy question: Behavior among younger workers
Corrective action 5-10 years before retirement is necessarily limited in its impact
Even younger and middle-age workers often express commitment to saving
The problem is they don’t get around to making good on that commitment
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7. Philosophical question: more education or reliance on defaults?
Power of automatic enrollment, automatic escalation, and automatic investment
Should we be focusing efforts primarily on automatic 401(k) and automatic IRA, rather than better education?
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