What Are the Odds of Running Short in Retirement?

July 23, 2010 (PLANSPONSOR.com) – According to the 2010 EBRI Retirement Readiness Rating (RRR), more than one-in-four Americans in the lowest income quartile could run out of funds after just ten years. 


In addition, EBRI’s RRR, from the nonpartisan Employee Benefit Research Institute (EBRI), finds that after 20 years of retirement, more than half (57%) of that group will run short of funds. 

Things turn out better for those in the highest-income quartile, where only 5% are deemed likely to run short, or the third-income quartile, where only 13% were seen as likely to do so. 

An individual or family is considered to “run short of money” if their aggregate resources in retirement are not sufficient to meet aggregate minimum retirement expenditures—defined as a combination of basic expenses from the Bureau of Labor Statistics’ Consumer Expenditure Survey and some health insurance and outofpocket health-related expenses, plus expenses from nursing home and home health care expenses, at least until the point they are picked up by Medicaid, according to EBRI. 

Prospects of Running Short of Money in Retirement by Income Quartile  

 10 Years of Retirement 20 Years of Retirement 
Lowest-Income Quartile           



2nd Income Quartile



3rd Income Quartile    



Highest-Income Quartile



Full details appear in the July EBRI Issue Brief, available at www.ebri.org