With the first big wave of baby boomers set to retire in 6 years, many individuals may not have accumulated enough assets to maintain a basic standard of living throughout retirement, new research from the Employee Benefits Research Institute concludes.[@@]

EBRI, Washington, found that 9% of Americans born between 1931 and 1941 lost 100% of their accumulated financial wealth (not including their home) from 1992 to 2002, while 30% saw this wealth decline 50% or more, and 34% suffered a decline of 25% or more. Although more than half of Americans aged 64 to 74 saw their wealth actually grow by 50% or better in the period, the data shows that a third were either on track to lose their wealth or had already done so, EBRI reports.

EBRI notes individuals just now starting to retire are the first to be affected by the shift starting in the 1980s away from defined benefit pension plans to lump-sum payments and 401(k)-type asset accumulation plans. They ranged in age from 51 to 61 in 1992, at the beginning of the study period, and had reached age 61 to 71 by 2002.

EBRI concludes that individuals may need to protect their retirement assets by arranging for more managed withdrawals or annuity payments, to produce a steadier draw-down of wealth in retirement. People now retiring may also need more help in managing significant wealth, EBRI says.

It calculates that, based on average earnings of $40,000 per household, maintaining a basic standard of living in retirement would require an annual stream of income between $28,000 and $32,000 a year.

The study was based on data compiled by the National Institute of Aging, Washington, and the Institute for Social Research at the University of Michigan.

Another EBRI study found that participation in 401(k)-type plans grew from 23% of workers in 1996 to almost 28% percent in 2001, while workers who had an IRA increased from almost 16% to 19% from 1996 through 2002.

The percentage of Americans who owned either type of plan increased from about 34% to 40%, with those owning both types of plan increasing from about 6% to 9%.