Retirement Savings Adequacy of U.S. Workers

13 Pages Posted: 11 May 2013

Date Written: March 12, 2013


Whether U.S. workers are saving adequately for retirement is an important subject for employer and public policy. The optimal target levels of retirement savings are here determined through a comprehensive consumption and savings model in a life-long planning framework. The actual wealth profiles of a representative sample of U.S. households are here computed from the Survey of Consumer Finances. Comparing the model targets with the actual savings suggests that 44 percent of workers in 2010 are saving inadequately if they were planning to retire at the normal age for full Social Security benefits; alternatively, 51 percent are inadequately prepared for retirement if they were planning to retire at their desired ages, typically younger. The prevalence of savings inadequacy has worsened, by 4-5 percent of households, compared to 2007 when the prospect of retirement looked brighter at the height of the economy and market in the last decade. Asset value losses in retirement accounts during the financial crisis and the decline of DB coverage are significant explanatory factors.

Suggested Citation

Pang, Gaobo and Warshawsky, Mark J., Retirement Savings Adequacy of U.S. Workers (March 12, 2013). Available at SSRN: or

Mark J. Warshawsky

Towers Watson ( email )

Arlington, VA
United States

No contact information is available for Gaobo Pang

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