Measuring Retirement Adequacy in a Dynamic Society
14 Pages Posted: 11 Sep 2020
Date Written: August 1, 2020
The determination of retirement adequacy is of interest to governments in setting policies related to government transfers, but different measures can result in different outcomes. This paper uses a broad definition of the components that contribute to retirement adequacy and shows that in aggregate, most countries’ retirees have a satisfactory replacement ratio but a 25% reduction in any of the components contributing to retirement adequacy could significantly change this outcome. The paper demonstrates the need for retirement adequacy determinations to be dynamic to adjust to changes in retirees’ environments, and for the need to adopt a retirement adequacy stress testing methodology when assessing retirement adequacy.
Keywords: Retirement adequacy, retirement replacement ratios, budgetary retirement standards
JEL Classification: G5, H5, I3
Suggested Citation: Suggested Citation