The National Retirement Risk Index and Annuities
October 1, 2010

The Center for Retirement Research at Boston College released a Fact Sheet on the National Retirement Risk Index ("NRRI") and Annuities.  The NRRI measures the percent of American households "at risk" of being unable to maintain their pre-retirement standard of living in retirement.  The Fact Sheet’s key findings are:
  • The NRRI assumes that households buy an annuity at retirement.
  • For High income families, the NRRI (the percent of households ‘at risk’ in retirement with an annuity) increases from 42 percent to:
    • 47 percent if households instead withdraw 4 percent per year; or
    • 57 percent if households instead live off their interest.
  • Not annuitizing hurts high-income households the most, because they rely more on their nest eggs in retirement.
  • While few buy annuities today, annuities could improve retirement security for future retirees.