Retirement Score In America Hits Historical High

Americans are more financially prepared for retirement than they have been in quite some time – with special kudos to millennials for the amount of money they’ve been putting away.

Still, Fidelity Investments’ latest biennial Retirement Savings Assessment study (which is mostly upbeat), states that many of those surveyed remain “at risk” of not being able to fully cover essential expenses in retirement if they don’t turn things around.

In particular, after tallying up the assets of the 25- to 74-year-old respondents earning at least ,000 annually – including current or expected Social Security benefits – Fidelity estimates that the typical saver should have 80 percent of the income he or she will need to cover retirement costs. That’s up since the study was first conducted in 2005, when the same figure was 62 percent.

“It’s a significant improvement,” says Ken Hevert, Fidelity’s senior vice president of retirement, who attributes the rise to both a higher median savings rate compared to 2006 and better portfolio asset allocation.

Put simply, Fidelity used four color-code categories to show where households fall on a retirement preparedness spectrum based on their ability to handle estimated expenses in a down market:

• Dark Green. Thirty-two percent were on target to cover more than 95 percent of their freight (up 1 percent from 2016).

• Green. Eighteen percent were looking good as far as essentials go, but not discretionary items such as travel and entertainment (down 1 percent from 2016).

• Yellow. Twenty-two percent were off track, with “modest adjustments” likely required to their planned lifestyles (down 1 percent from 2016).

• Red. Twenty-eight percent definitely “need attention,” (up 1 percent from 2016).

But perhaps the biggest surprise in the study had to do with millennials.

For the first time ever, those born between 1981 and 1992 have caught up with Generation X. The latter are on track to have 78 percent of the retirement income they’ll need, while the former lags behind by 1 percent.

And Baby Boomers? Collectively, they’re in the best position of all, especially those Boomers with increasingly rare pensions, and who are on course to have set aside 86 percent of the money they’ll need.

For those curious where they stand, Fidelity allows everyone to access their retirement score online. And if you really want a cushy retirement, keep in mind that you could have 108 percent of what you’ll need by embracing all three of the following “accelerators”: saving at least 15 percent of your income yearly, ensuring an age-appropriate asset mi, and deferring Social Security benefits till at least 66 or 67.