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Nearly Half of Americans at Risk of Running Short of Money in Retirement

July 30, 2010 Written by: Written by John R.Dean, CPC,RHU

If you think having too much month at the end of your money is a problem, imagine running out of money during retirement.  A recent report released by the Employee Benefit Research Institute estimates that nearly half of all Americans are at risk for having inadequate retirement savings.

In formulating these projections, researchers analyzed and simulated six sources of retirement income: social security, defined contribution balances, IRA balances, defined benefit annuities and/or lump-sum distributions, and net housing equity.

While the study predicts that slightly more than 47 percent of Americans aged 56 – 62 are estimated to have inadequate income in retirement, that number is lower for those aged 46 – 55 and then, interestingly, increases for those aged 36-45.

The possibility of not having enough money to cover basic expenses in retirement is frightening. And it’s just one more reason it makes sense for government contractors to use the fringe portion of the prevailing wage to provide bona fide benefits, including retirement plans, for their hourly workers.