retirement readiness: a framework and prospects for future improvement
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Retirement Readiness: A Framework and Prospects for Future Improvement. ASEC Partners Meeting. ASEC General Partners Meeting October 20, 2010 Don Ezra. Don Ezra ASEC Fellow. October 20, 2010. Think of several “wealth zones”. Continue to accumulate. - PowerPoint PPT PresentationTRANSCRIPT
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Retirement Readiness: A Framework and Prospects for
Future Improvement
Don EzraASEC Fellow
October 20, 2010
ASEC Partners Meeting
ASEC General Partners MeetingOctober 20, 2010
Don Ezra
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Endowed zone
Bequest zone
Lifestyle zone
Essentials zone
Pre-annuitized wealth
Think of several “wealth zones”
Continue to accumulate
Enough to annuitize or support lifestyle
Enough to annuitize or support essentials
EBRI findings for the Essentials Zone
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Early Baby Boomers: 47% won’t attain the ceiling
Late Baby Boomers: 44%Gen Xers: 44%
An improvement of 12 percentage points in seven years
Lowest one-third by income: 70%Middle one-third: 42%Top one-third: 23%
How much will it help to save more?
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Early Baby Boomers, lowest income group: more than 25% of pay needs to be added to annual saving, to bring failure rate down to 50%
Above-median income groups: additional 10% of pay saved would raise success rate above 90%
And some don’t need to save any more at allAuto-enrollment and auto-escalation features in
DC plans are enormously powerful, particularly for those with 30-40 years of future saving
Lower-income: reaching post-retirement target of 80% of pre-retirement income (preserved in real terms): 46% success improves to 79%
Higher income: 27% improves to 64%