Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

America's $4.6 trillion retirement hole

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Americans are woefully unprepared to pay for retirement, according to research released Thursday.

On average, U.S. workers would need to have an additional $48,000 when they retire at 65 to ensure they don't run shy of cash in retirement, the Employee Benefit Research Institute said.

All told, the group estimates that the national retirement deficit is $4.6 trillion.

The research group estimated how much money retirees will need for "basic" expenses such as food, shelter and uninsured health care costs. It compared those expenses to the financial resources workers are likely to have at the typical retirement age, including Social Security, pensions and savings plans such as 401(k)s.

If Social Security benefits are deducted, the group estimates that the national retirement deficit would jump to $8.5 trillion, or about $89,000 for the average worker.

In all cases, low-income workers are most at risk of not having enough savings to retire on, Jack VanDerhei, research director at EBRI, told lawmakers Thursday. EBRI estimates that 41% of low-income Baby Boomers will run short of money within 10 years of retirement.

However, he noted that the number of households that are projected to have inadequate retirement income has declined since the last time EBRI studied the topic in 2003.

VanDerhei said the improvement over the last seven years is largely due to an increase in the number of employers that automatically enroll workers in 401(k) plans.

Automatic enrollment, which allows workers to opt out, can increase participation in retirement savings plans dramatically, he said, particularly among lower-income employees.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.97%4.04%
15 yr fixed3.15%3.20%
5/1 ARM3.33%3.37%
30 yr refi3.99%4.08%
15 yr refi3.17%3.23%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 19,614.81 65.19 0.33%
Nasdaq 5,417.36 23.59 0.44%
S&P 500 2,246.19 4.84 0.22%
Treasuries 2.39 0.04 1.70%
Data as of 4:44am ET
Company Price Change % Change
Bank of America Corp... 22.95 0.38 1.68%
Chesapeake Energy Co... 7.60 0.02 0.26%
Ford Motor Co 13.03 -0.03 -0.23%
Wells Fargo & Co 57.29 0.01 0.02%
Micron Technology In... 20.66 0.22 1.08%
Data as of Dec 8
Sponsors

Sections

Andy Puzder, Trump's choice for Labor secretary, thinks it's great that his restaurants use racy ads to sell hamburgers. More

Trump says he sold all his stocks in June. But what about his hedge funds? He was (and may still be) invested in three run by John Paulson, a major campaign donor. More

Sean Rad will be stepping away from his day-to-day duties as Tinder CEO in order to run Swipe Ventures. More