Generation Xers with at least 20 years of future eligibility are projected to have a much lower financial shortfall ($23,000 per individual) than those without any future years of eligibility ($78,000 per individual), according to EBRI’s latest Retirement Security Projection Model.
EBRI’s estimate includes nursing home and home health care expenses, which EBRI says leads to a more realistic projection.
“Ignoring the impact of nursing home and home health care costs in retirement significantly overstates the likelihood of retirement income adequacy,” said Jack VanDerhei, EBRI’s research director.
When nursing home and home health care expenses are taken into consideration, 68% of single male Gen Xers look to have no financial shortfall in retirement. If these expenses are not factored in, a much larger percentage (90%) has what is actually a falsely optimistic picture of retirement adequacy.
Earlier EBRI research has found that about 44% of both Baby Boomer and Gen Xer households are likely to be at risk of running short of funds during retirement, assuming they retired at age 65 and retained any net housing equity in retirement until other financial resources were depleted. (See “More Workers Estimated To Be Retirement Ready.”)
The full report is available in the June issue of EBRI Notes.