Intergenerational Comparison of Retirement Income

Barbara Smith, U.S. General Accounting Office (GAO)
Michael J. Collins, U.S. General Accounting Office (GAO)
Brendan Cushing-Daniels, U.S. General Accounting Office (GAO)
Janice L. Peterson, U.S. General Accounting Office (GAO)
Alicia P. Cackley, U.S. General Accounting Office (GAO)
Grant Mallie, U.S. General Accounting Office (GAO)

Possible reductions in future Social Security benefits, the lack of widespread pension coverage, and low levels of personal saving all have implications for the amount of retirement income current workers can expect to receive. In this paper, we describe how demographic, economic and legal changes might affect the total amount of expected retirement income and the relative contributions of Social Security, pensions, and personal savings. We use the Federal Reserve Board’s Survey of Consumer Finances to compare the levels of personal savings and debt of workers in the Baby Boom and in Generation X with those of current retirees at similar ages. We use simulation models to estimate the levels of retirement income that Baby Boom and Generation X workers can expect to receive from private pensions and Social Security. Our results should be of interest to policymakers concerned about the possibility of inadequate retirement income for current workers.