WASHINGTON, D.C.—A recent analysis by the nonpartisan Employee Benefit Research Institute (EBRI) found that the average American retirement savings shortfall is about $48,000 per individual—and that adding nursing home and home healthcare costs would in some cases almost double that amount.
EBRI’s research uses the Institute’s Retirement Security Projection Model to estimate the total national aggregate and individual retirement deficits at age 65 for three cohorts of workers (early and late baby boomers and Generation Xers). First presented in testimony before the Senate HELP Committee this month, EBRI’s analysis found the aggregate national retirement savings shortfall is $4.6 trillion, for an overall average of $47,732 per individual. The average shortfall varies by age, gender, and marital status.
In the more detailed analysis published in the October issue of EBRI Notes, EBRI says that adding nursing home and home healthcare expense increases the average individual retirement savings shortfall for married households by $25,317. Single males experience an average increase of $32,433, while single females have an increase of $46,425.
“This helps quantify just how large of an impact nursing home and home healthcare expenses can have on people in retirement,” said Jack VanDerhei, EBRI research director and author of the report, in a release.
EBRI’s estimates are present values (stated in 2010 dollars) at age 65, and represent the additional individual average amount needed at age 65 to eliminate expected deficits in retirement. EBRI notes this aggregate deficit assumed that Americans will receive current-law Social Security benefits.
In regards to Social Security, the analysis found that if Social Security retirement benefits were eliminated, the aggregate national retirement income deficit would almost double, to $8.5 trillion, or an individual average of approximately $89,000.
Full EBRI report: ‘Retirement Savings Shortfalls for Today’s Workers’ (PDF format)
EBRI testimony before Senate HELP Committee: ‘The Wobbly Stool: Retirement (In)security in America’ (PDF format)