The percentage of workers at risk for not having adequate retirement income has dropped in the last seven years, despite the recent recession. That's one of the findings of the Employe Benefit Research Institute's 2010 Retirement Readiness Rating report, which the Wall Street Journal's Jeannette Neumann reports on. Yet EBRI warns that the picture still isn't rosy.

Fundsters interested in retirement plans may want to take a look at the WSJ article or at the full report available online in EBRI's latest "Issue Brief".

"Things are getting better," EBRI's Jack VanDerhei told the WSJ, comparing the 2010 numbers with those from EBRI's first similar study, back in 2003. "But there is still a very large percentage of households and workers who are likely to be at risk for retirement income security."
Alan Glickstein, a senior retirement consultant at Towers Watson, weighs in to note the positive impact of the Pension Protection Act of 2006, which encouraged the use of 401(k) features like automatic enrollment (with an opt-out provision), automatic escalation (which increases workers' savings rates each year until they reach a certain level, unless they opt out) and diversified default investments like target date funds (called "qualified default investment alternatives" in PPA speak).

According to EBRI, the percentage of workers at risk of having inadequate retirement dropped more than 10 percent across three different age-groups between 2003 and 2010: for "Early Boomers" (now between 56 and 62 years old), it fell from 59.2 percent at risk to 47.2 percent; for "Late Boomers" (now between 46 and 55) it fell from 54.7 percent to 43.7 percent; and for "Generation Xers" (now between 36 and 45) it fell from 57.4 percent to 44.5 percent. 

Edited by: Neil Anderson, Managing Editor


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