Retirement Vulnerability Index Highlights Need for Sources of Guaranteed Income

A not for profit coalition of organizations known as Americans for Secure Retirement has published an interesting summary of an Ernst and Young study that focuses on the impact of longevity risk on middle-income Americans.

The Retirement Vulnerability Index is an interactive map that provides state-level summaries of the data from the Ernst and Young Study.

The following results are displayed for each state:

  • The probability of retirees who are both near retirement and at retirement outliving their financial assets.
  • The probability of retirees outliving their retirement based on income.  Results are shown at the $50K, $75K and $100K income levels.  Results are also shown for retirees with defined benefit pensions and those without pension benefits.
  • The percentage reduction in retirees' standard of living necessary to avoid outliving financial assets.

The difference in results for those with access to pension income compared to those without access is revealing and interesting.

The study data focuses on middle-income Americans and uses U.S. Census data, household asset estimates, savings rates, longevity tables, inflation and investment returns--all of which are plugged into a simulation model.


Key Phrases Autotag: 


The info is all about longevity risk (the risk of outliving financial resources in retirement) and how it impacts middle income Americans.

The reality is that most people are unprepared and do not have sufficient funds for retirement.

People can take a look at the info in their state or nationwide to think about their own retirement finances.

The study highlights the need for: a) greater retirement savings / funds for Americans who are not "high net worth" and; b) the huge value of stable sources of guaranteed income such as a defined benefit pension plan or annuity.