Cross your fingers for a positive outcome after this year's election theatrics finally die down – America's retirement options are looking pretty shaky in the meantime and stability is definitely a much-desired virtue.
That's the sense one gets from the numbers in the most recent National Retirement Risk Index statement, with the risk factor escalating dangerously.
In fact, the 9 percentage jump in the index – a metric tracked by the Boston College Center for Retirement Research, itself underwritten by Prudential Financial – now brings the Risk Index to indicate that 53 percent of American households stand at risk of being unable to maintain their pre-retirement standard of living, after retirement. The data is partially based on the Federal Reserve's 2010 Survey of Consumer Finances.
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The reason for the major jump? Low interest rates, a major decline in housing values and a continued push to higher and higher retirement ages, according to the survey's sponsors.
"The significant increase in the number of households at risk reflects the dramatic change in the economic environment between 2007 and 2010, as well as the gradual rise in the full Social Security retirement age from 65 to 67," said Christine Marcks, president of Prudential Retirement.
"The index reflects a decline in equity values and housing wealth, as well as low interest rates. While equity markets have risen since 2010, depressed housing values and continued low interest rates remain significant challenges to Americans' ability to achieve retirement security."
According to the data, while older households were the hardest hit by the repercussions of the seemingly ongoing financial downturn, the biggest threat is faced by younger Americans.
Between 2007 and 2010, the retirement risk index for households between ages 50 and 59 rose by more than a third, increasing from 32 to 44 percent.
The index also increased from 53 to 62 percent for 30-to 39-year-olds; the higher levels of risk for younger households reflect the increase in the Social Security full retirement age and the need for retirement income to last over longer life spans, according to researchers.
"At a time when Americans have an increased risk of not being able to achieve retirement security, the value of income certainty in retirement has never been more important," added Bob O'Donnell, president of Prudential Annuities.
"While Social Security and guaranteed income products have a key role to play, the bottom line for most households is that they will need to save more for retirement if they are to maintain the standard of living they desire."
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