BOSTON ( TheStreet) -- For those stressed out by the prospect they may not have enough money saved for retirement, a study released this week by the Employee Benefit Research Institute will be of little comfort.
The study, based on an analysis of 24 million participants in 401(k) plans, is touted as the first time a national retirement model has projected when different groups, based on age and income, are likely to exhaust their retirement savings. The conclusion: "Dramatically high percentages of Americans -- even in the upper-income categories -- are likely to run short of money after 10 or 20 years of retirement." Nearly half of "early" baby boomers -- those on the verge of retirement, ages 56 to 62 -- are at risk of not having sufficient income to pay for basic postretirement expenditures and medical expenses. The percentage drops for "late" boomers (ages 46 to 55) to 43.7%. Generation X (born 1965-74) has a 44.5% chance of running out of money based on savings projections. The study factored in a variety of retirement income sources, including 401(k)s, IRAs, pensions and Social Security benefits. Savings were calculated on an assumption stocks would return 8.9% and bonds 6.3% each year. Dividing its national sample into four preretirement income categories, ranging from poorest to wealthiest, the study concluded that almost two-thirds (64%) of Americans in the two lowest income levels will be running short after 10 years in retirement. After 20 years of retirement, nearly a third of those in the next-to-highest income level won't have any money left. Even the wealthy can't count on their money lasting a lifetime. According to EBRI's projection, 13% of the wealthiest quartile of Americans are in danger of churning through their savings within 20 years of retirement. "Policy makers need to understand what percentage of the population is likely to fail to achieve retirement security under current conditions," says Jack VanDerhei, principal author of the study. "Even more important is to identify which of those households still have time to modify their behavior to achieve retirement security, and how they need to proceed." The institute touts itself as a nonprofit and nonpartisan supporter of employee benefits plans. At its creation in 1978, members acknowledged "their common business interests will be furthered" by the work, but vowed to "function strictly in an objective and unbiased manner." Its findings have generally been accepted at face value.