Retirement Security Projection Model^®

Retiree health savings: Projected savings targets needed to cover health care in retirement are going up again after several years of decline, according to new research by EBRI. This follows more recent declines during 2012-2014.

DB-DC: Does a traditional “defined benefit” pension provide greater retirement security than a “defined contribution” 401(k)-type plan? The complicated answer to that simple question depends on your salary level and the level of pre-retirement income to be replaced, according to a new analysis by EBRI.

HSA Investment Options: Investment options in health savings accounts (HSAs) are a fairly new and not widely used option, but they tend to draw larger contributions and have higher balances where they do exist, according to a new analysis by EBRI.

Longevity Annuity Contracts: A recently authorized feature for 401(k) plans would allow workers to transform all or part of their retirement savings into a guaranteed stream of lifetime income, similar to what traditional pensions can provide. New modeling from EBRI finds this feature would be a significant help as a way to reduce their “longevity risk”—the risk of outliving their retirement savings—but only to those workers who can expect to have a long retirement.

Savings needs: How much do workers need to have saved for retirement at different ages? And based on their age and income, how much needs to be contributed to their defined contribution plan to ensure a financially successful retirement? New research from EBRI helps answer these important questions.

Health account contributions: Both employers and workers decreased their contributions to health savings accounts (HSAs) last year, according to new research from EBRI.

Health Plans: Who’s happier with their health plan—those in “traditional” managed care plans, or those in so-called “consumer-driven” and high-deductible plans? The latest data from EBRI show that the overall satisfaction rate among consumer-driven health plan (CDHP) enrollees is gradually increasing, while it is gradually decreasing among traditional enrollees.

Gen Xers: Are Gen Xers in worse shape than the Baby Boom generation when it comes to having enough money for retirement? Not if you take into account future contributions and the current trends in automatic plan design features, according to a new report by EBRI.

“Short” Falls: Will Baby Boomers and Gen Xers have enough money to live on when they retire, and if not, when will they run short? New modeling by EBRI finds that those in the lowest-income brackets are most likely to run short, many in the first year of retirement. But some in all income brackets—including the highest—may also run short at some point during their retirement.

HSA/HRA Consumer Engagement: Which type of health plan is more likely to get workers involved in their own health care: Health savings accounts or health reimbursement arrangements? The two account-based types of health insurance are similar, but a new report from EBRI finds that people with HSAs are more likely to engage in cost-conscious behavior related to use of health care services than are those in HRA.

Prescription Drug Use: Do consumer-directed health plans (CDHPs) result in lower prescription drug use? New research from EBRI of one big employer finds that moving to an HSA-eligible plan reduced the number of both generic and brand-name prescriptions filled.

Lifetime Income Illustrations: Do consumer-directed health plans (CDHPs) result in lower prescription drug use? New research from EBRI of one big employer finds that moving to an HSA-eligible plan reduced the number of both generic and brand-name prescriptions filled.

Workplace Benefits Survey: Most workers are satisfied with the health benefits they have now and express little interest in changing the current mix of benefits and wages offered by their employers, according to a new survey by EBRI.

DB-DC: How generous would a traditional pension plan have to be in order to produce as much income as a 401(k)? New modeling from EBRI finds there’s no simple answer, but rather tremendous variation, depending on the different factors involved.

Which type of retirement plan is likely to produce more money for retirement: A voluntary-enrollment 401(k), a traditional final-average defined benefit plan, or one of the newer cash balance plans? A detailed analysis by EBRI finds there is no single answer because a multitude of factors affect the ultimate outcome: interest rates and investment returns; the level and length of participation; an individual’s age, job tenure, and remaining length of time in the work force; and the purchase price of an annuity, among other things. EBRI Issue Brief Jun 28, 2013 52 pages

Low-yields and Retirement: As many retirees and workers have discovered, today’s historically low interest rates are crimping their retirement savings. Now a new study by EBRI quantifies the impact of a sustained low-interest rate environment on America’s retirement readiness.

Health Access: Whether it’s a “consumer-driven,” high-deductible, or traditional managed-care health plan, a significant number of people with health insurance report problems with access to health care services, according to new research by EBRI.

Retirement-Savings Targets: The use of online calculators and retirement advisors has been linked to higher levels of retirement confidence – and with justification, according to new research from EBRI.

Health Benefits: With key provisions of the federal health care reform law scheduled to take effect in the near future, what’s in store for the existing system of employment-based health benefits? That was the focus of the 71st policy forum sponsored by EBRI, which brought in some of the nation’s top health experts, including Assistant Secretary of Labor Phyllis Borzi. Employment-based health benefits remain the most common form of health coverage in the United States.

Self-Insured Health Plans: Large private-sector employers are driving a trend toward more “self-insured” health plans, according to a new report by EBRI.

Retirement Readiness: Among those who are likely to miss their retirement savings goal, how many will be close? And how many will miss it by a mile? According to a new report by EBRI, nearly half of Generation X households will have enough to cover basic retirement costs, and about a third will fall short—but not by much. About 20 percent are likely to be far off-target.

Health Confidence Survey: The recent U.S. Supreme Court decision upholding the constitutionality of the Patient Protection and Affordable Care Act (PPACA) appears to have have had little impact on Americans' confidence about their health care, according to a new report by EBRI.

401(k) Contributions: Setting a higher starting point for 401(k) contributions would make a significant difference in improving workers’ likelihood of a financially viable retirement, according to new research by EBRI.

Health Care Satisfaction: Satisfaction levels are rising among people enrolled in “consumer-driven” health plans, while they are declining among those in traditional health plans, according to a new report by EBRI. Dissatisfaction with out-of-pocket costs may be driving overall satisfaction trends.

Working to 70?: Contrary to some reports that working just a little bit longer—to age 70—will allow between 80 and 90 percent of households to have adequate income in retirement, new research by EBRI shows that for approximately one-third of the households between the ages of 30 and 59 in 2007 that won’t be enough.

Access Issues by Type of Health Plan: Many American have difficulty getting access to health care services regardless of their type of health plan, according to a new report by EBRI.

Impact of Eligibility for Participation in a 401(k) Plan: Eligibility for participation in a workplace 401(k) savings plan is one of the single-most important factors in closing the retirement savings gap for Generation X, according to a new report by EBRI.

Retirement Income Adequacy: Roughly 44 percent of Baby Boomers and Generation Xers are projected to lack adequate retirement income to cover basic expenses and uninsured health care costs, according to the latest estimates by EBRI.

Employment-based Coverage: A new report by EBRI, which looks at month-by-month health coverage rates before, during, and after the recession, finds that a brief uptick in employment-based coverage immediately after the recession has not endured: The percentage of workers with employment-based health coverage continues to shrink.

401(k) Tax Treatment: A recent proposal to change the tax preferences for employment-based 401(k) retirement plans could result in an average reduction in 401(k) account balances of between 6-22 percent at Social Security normal retirement age for workers currently ages 26-35, according to new research by EBRI. Reductions could be even greater for participants in small 401(k) plans.

Health Coverage of Part-time Workers: In the wake of the economic recession, the number of part-time workers who lack health insurance is increasing, according to new research from EBRI.

The Impact of Repealing PPACA on Savings Needed for Health Expenses for Persons Eligible for Medicare

New modeling by EBRI finds that Medicare beneficiaries with high levels of prescription drug use would have to save 30-40 percent more than they currently are to pay for higher drug costs if President Obama’s health reform law is repealed. Medicare beneficiaries with median prescription drug costs would not see any change in their savings targets, EBRI’s analysis finds. EBRI takes no position on whether or not the law should be repealed; rather, its analysis is designed to measure which groups would be affected and provide estimates of additional savings needed by those who would be affected if it was.

The Importance of Defined Benefit Plans for Retirement Income Adequacy

Baby Boomer and Generation X households that have a defined benefit (DB) pension plan accrual at retirement age are overall almost 12 percentage points less likely to be “at risk” of running short of money for basic needs and uninsured health costs in retirement, according to a new report by EBRI. The report finds that having a DB pension plan is particularly valuable for those with the lowest income in both age groups, but also has a “strong impact” on reducing at-risk rates for those in the middle class: Among those in the second- and third-income groups combined (covering middle-income workers), the combined relative at-risk reduction is almost 20 percent.

Tax Cap: A new analysis from EBRI finds that the National Commission on Fiscal Responsibility and Reform proposed tax reform for 401(k)-type retirement plans would cause the greatest reduction in retirement savings for both the highest- and lowest-income workers.

Union Health Insurance: Both union and nonunion employment-based health benefits were affected by the recent economic recession—but unionized worker health insurance coverage suffered less, according to a new analysis from EBRI.

Health Benefits: The future of employment-based health programs in the wake of the 2010 November election and the enactment of the Patient Protection and Affordable Care Act (PPACA) was just one of the topics addressed by human resource and health policy experts at EBRI’s 67th Fall policy forum last December.

Future Eligibility in DC Plans: New research from the nonpartisan Employee Benefit Research Institute (EBRI) shows that being eligible to participate in a defined contribution retirement plan at work is a key factor in whether workers will have enough money to afford basic expenses and cover uninsured medical care in retirement.

Retirement Plan Tax Treatment: New research by EBRI finds that lower-income workers are more likely than upper-income workers to say they would reduce their savings if the tax exclusion for employee contributions to retirement savings plans was lowered or eliminated.

Account-based Health Plans: Contributions from employers to workers’ account-based health plans declined for the second year in a row in 2010, according to new findings by EBRI. However, workers with employee-only coverage responded to the decrease from employers by increasing their own personal contributions; workers with family coverage did not increase their contributions.

Retirement Savings Shortfalls: Recent analysis by EBRI finds that the average retirement savings shortfall is about $48,000 per individual—and that adding nursing home and home health care costs would in some cases almost double that amount.

COBRA: The federal subsidy to help laid-off American workers pay for continued health care through the COBRA program helped fewer individuals than expected—in part because COBRA premiums remained unaffordable for many families even with the subsidy, according to a new article by EBRI.