It’s one of the most hotly debated questions: will Social Security and retirement savings be enough to sustain workers in retirement?
The Employee Benefit Research Institute says that current levels of Social Security benefits coupled with at least 30 years of 401(k) savings could provide most workers with annual income of at least 60 percent of their preretirement pay on an inflation-adjusted basis.
In just-released research, EBRI says that assuming current Social Security benefits are not reduced, 83 percent to 86 percent of workers with more than 30 years of eligibility in a voluntary enrollment 401(k) plan are simulated to have sufficient 401(k) accumulations that, combined with Social Security retirement benefits, will be able to replace at least 60 percent of their wages and salary at age 64 on an inflation-adjusted basis.
When the threshold for a financially successful retirement is increased to 70 percent replacement of income at age 64, 73 percent to 76 percent of these workers will still meet that threshold, relying only on 401(k) and Social Security combined. At an 80 percent replacement rate, 67 percent of the lowest income quartile will still meet the threshold.