The National Institute on Retirement Security released on Thursday its State Financial Security Scorecards, which summarize each state’s retirement outlook. Diane Oakley, executive director for NIRS, led a webinar on Thursday discussing the results.
“We’ve certainly seen a growing interest in how individuals are being prepared for retirement and what the challenges they face are,” Oakley said. “At the state level, one of the things we know is the safety nets’ needs are likely to increase as we know the population in the United States continues to age.”
She said that the three potential sources of economic insecurity (not having enough money, having expenses grow beyond what people can afford, and not being able to find work) “are all key things that deserve attention.”
The states’ scores are based on eight economic variables in three categories: retirement savings, current retiree costs and labor market conditions for older workers.
Retirement income takes into account participation rates in private retirement plans; the average defined contribution account balance; and the marginal tax rate on pension income.
Retiree costs include Medicare out-of-pocket costs; Medicaid generosity, which was measured by the average spending by the state per elder beneficiary; and the housing cost burden.
The labor market score is based on the unemployment rate for people 55 and older, and the median hourly earnings rate for people in the same age group.
“Every state has something that needs to be done, and states must remain vigilant over time.”