Nearly Four in Ten Americans Approaching Retirement Fall Short of What Retirement Living Costs Require

Summary

Roughly 36-40% of American households approaching retirement (ages 50-64) are on track to fall short of the income they need to maintain their pre-retirement standard of living, according to the leading academic models that measure this directly. Boston College's National Retirement Risk Index (NRRI) puts the figure at 36% of households ages 50-59 as of the 2022 Survey of Consumer Finances (down sharply from 48% in 2019, mostly because of a temporary run-up in home prices, and researchers expect it to drift back toward 40-50% as that fades). EBRI's Retirement Security Projection Model puts the broader working-age figure at 40.1% projected to run short of money at some point in retirement. On a stricter, basic-needs-only standard, the Elder Index finds 48% of people 65+ living alone (21% of older couples) have incomes below what it costs to cover housing, food, health care and transportation in their own state. Among households that ARE falling short, the average dollar shortfall for those nearest retirement (EBRI's 'Early Boomer' cohort) runs from roughly $71,000 per individual for a married household up to $105,000 for a single female in present-value terms, and Vanguard's model finds a median worker's retirement resources cover only about two-thirds of the income their own pre-retirement spending implies they'll need (a roughly -33% gap at the median).

How "falling short" is defined and measured

Neither the U.S. government nor this corpus (AskAmerica's own tables were checked first - search_catalog and list_tables confirm the census, econ and fiscal schemas carry income, poverty and wealth-adjacent tables like census.acs_income and econ.state_personal_income, but the terms "retirement adequacy," "replacement," and "shortfall" matched zero tables or columns across two separate catalog searches) publishes a single official retirement-shortfall statistic. Independent research organizations fill that gap, and they measure it three distinct ways, corresponding to three different definitions of "enough":

• Meeting basic needs - the Elder Index (SCEPA / UMass Boston Gerontology Institute) compares actual income against the real local cost of housing, food, health care, transportation and other necessities for someone living independently, by state and household type.
• Staying out of poverty - official and relative poverty thresholds, and the U.S.'s international standing on elder poverty (about 23%, versus roughly 12% in Canada and 3-6% in France/Netherlands).
• Maintaining your pre-retirement standard of living - the standard both CRR's National Retirement Risk Index (NRRI, using the Fed's triennial Survey of Consumer Finances) and EBRI's Retirement Security Projection Model (RSPM, a 1,000-path-per-household Monte Carlo simulation to age 65+) use: project retirement income from Social Security, pensions, savings and housing equity, compare it to a "target replacement rate" consistent with a household's own pre-retirement spending, and flag anyone falling more than 10% short as "at risk." Vanguard's Retirement Outlook uses the same logic with its own "sustainable replacement rate" concept.

The Federal Reserve's Survey of Household Economics and Decisionmaking (SHED) supplies a fourth, non-model check: whether people say they feel "on track" themselves.

How many are falling short

By age group (NRRI, 2022 SCF, the most current published breakdown):

The 2022 improvement across every cohort was driven almost entirely by a run-up in home prices (about 22% real, 2019-2022) and a pandemic-era spike in personal savings - both flagged by CRR's own authors, and independently by SCEPA, as likely to partly reverse, with the Index expected to drift back toward the 40-50% range it occupied 2010-2019. Renters remain far worse off than homeowners at every age (72% at risk in 2022 vs. 24% for homeowners), and households with no employer retirement plan remain the worst off of all (65% at risk, barely changed since 2019). By wealth tercile (CRR data cross-tabulated by The Motley Fool), 73% of low-wealth workers are at risk versus 40% of middle-wealth and 28% of high-wealth workers.

EBRI's Retirement Readiness Rating found 59.9% of individuals are projected to NOT run short of money in retirement - meaning 40.1% are projected to run short at some point. In EBRI's most detailed published age-cohort breakdown (Early Boomers, the cohort then nearest retirement), 47.2% were "at risk", rising to 70.3% for the lowest pre-retirement income tercile versus 23.3% for the highest.

On the stricter basic-needs standard, the numbers are worse, not better. The Elder Index finds 48% of older adults living alone, and 21% of older couples, have incomes below what it actually costs to live independently and age in place in their own community - in every single state, more than one-third of older singles fall short. Economic insecurity is also sharply unequal by race: 50% of White households are at risk of being unable to afford basic living expenses locally, rising to 61% for Asian, 66% for Black, and 74% for Latino/Hispanic households. Separately, about half of Americans ages 62-74 have retirement resources supporting less than $25,000 per person per year - near the poverty line and far below the roughly $42,000 relative-poverty (50%-of-median-income) benchmark used internationally.

Self-reported confidence lands close to the models. Only about 35% of people approaching retirement say they feel "on track," per SCEPA's synthesis of Federal Reserve SHED data; in the Fed's own most recent published survey (2023 data, fielded 2024), only 38% of the 45-59 age bracket said their retirement savings plan was on track, and just 20% of non-retirees who had recently borrowed from or cashed out retirement funds felt on track.

How far short

Among households that ARE projected to fall short, the shortfall is not small. In EBRI's cohort-level dollar estimates for the group closest to retirement (Early Boomers), the average retirement savings shortfall - the present value of the cumulative deficit needed to avoid running out of money - was:

• $71,299 per individual for married households that fall short
• $93,576 per individual for single males who fall short
• $104,821 per individual for single females who fall short (longer life expectancy and lower average lifetime earnings both raise this figure)

Averaged across ALL households in that cohort (including those with no shortfall at all), the married-household figure drops to about $19,300 per individual - the deficit is concentrated among the roughly 40-47% actually at risk, not spread evenly.

Vanguard's model tells the same story in percentage-of-income terms. For workers at the 25th income percentile, spending needs in retirement run about 96% of pre-retirement income (down to 43% for the top 5%), while their sustainable replacement rate - what their actual resources can support - covers only about 64%. The resulting retirement gap is roughly -32% of pre-retirement income at the 25th percentile and -33% at the median, narrowing to -17% at the 75th percentile and flipping to a +20% surplus only at the 95th percentile.

In raw dollars, SCEPA's reality check using Health and Retirement Study data is stark. Among adults 51-56 (the cohort a decade or so from typical retirement), median private retirement wealth in 2016 was about $55,000 - which, even under optimistic assumptions (5% return, 20-year payout, zero pre-retirement withdrawals, no fees or taxes), converts to only about $368 a month in private-asset income on top of Social Security. The bottom segment of that wealth distribution ($12,800 median) converts to about $100 a month; even the middle 40% ($152,000 median) converts to about $1,016 a month - less than the era's federal poverty threshold for a single person ($1,040/month in 2016 dollars).

At the national level, EBRI's aggregate retirement income deficit - summed across all U.S. households age 25-64 - is estimated at $4.13 trillion in its most recent detailed published breakdown (rising to $4.38 trillion, +6%, under a pro-rata Social Security benefit cut starting 2033; and to $7.87 trillion, +88%, if Social Security were eliminated entirely). Separately, benchmarking firm Aon estimates a household needs private assets equal to about 11.1 times final annual spending at age 67 on top of Social Security to sustain its standard of living through age 90 - a target SCEPA notes fewer than 1 in 10 older workers are actually on pace to hit, given that typical contribution rates run only 4-7% of pay versus the roughly 16% Aon's own model requires starting at age 25.

A caveat that matters: the headline model-based numbers are conservative

Both the NRRI and EBRI RSPM assume every household converts 100% of its financial assets into an inflation-indexed annuity at retirement AND extracts its full home equity via a reverse mortgage. Very few retirees actually do either. CRR's own 2024 brief cites Vanguard research finding that at least 70% of households would fall short of their pre-retirement standard of living once home equity is excluded - nearly double the NRRI's home-equity-inclusive 39% headline figure. Vanguard's boomer breakdown shows the same pattern for low-income households specifically: only 15% are projected retirement-ready on a strict basis, rising to 42% only once home equity is counted. The 36-40% figures in the models above should be read as something close to a floor on how many people are underprepared, not a ceiling - and the Elder Index's stricter basic-needs measure (48% of older singles short) suggests the true picture, on a needs basis rather than a lifestyle-maintenance basis, may be worse still for the lowest-income segment of this population.

Data coverage note

This corpus (AskAmerica's own warehouse) was checked first via two separate search_catalog queries ("retirement savings income replacement" and "retirement adequacy income replacement rate savings shortfall") plus list_tables on the census schema, and confirmed to carry no retirement-adequacy, savings-shortfall, or income-replacement-rate series - the exact terms "adequacy," "replacement," and "shortfall" matched zero tables or columns in either search. It does carry state/county income and wealth-adjacent tables (census.acs_income, econ.state_personal_income) that are not fit for this specific question, which measures projected retirement income against a modeled need, not current income alone. The figures above are therefore drawn directly from the primary research organizations that publish this measure nationally - CRR, EBRI, Vanguard, SCEPA/Elder Index, and the Federal Reserve - fetched and read from their own original issue briefs and reports, not from secondary summaries, with one secondary aggregator (The Motley Fool) used only for its wealth-tercile cross-tabulation of CRR's own data.