EBRI Says Half of Boomers Likely to Outlive their Savings

The analysis shows how early boomers' retirement money will fall short by preretirement income quartiles, assuming retirement at age 65. After 10 years of retirement the lowest-income quartile has a 41% chance of running short of money. The next-lowest quartile has a 23% chance, the third income quartile has a 13% chance and the highest-income quartile has a 5% chance.

Broken out by age, early boomers (now ages 56-62) have a 47.2% chance of outliving their assets, late boomers (now ages 46-55) have a 43.7% chance of outliving their assets and Generation Xers (now ages 36-45) have a 44.5% chance of outliving their assets.

When the results of the analysis are classified by future eligibility in a defined contribution plan, such as a 401(k), the differences in the "at-risk" percentages are large. For example, Gen Xers with no future years of eligibility have an "at-risk" level of 60%, compared with only 20% for those with 20 or more years of future eligibility.

According to EBRI, an individual or family is considered to "run short of money" if their aggregate resources in retirement are not sufficient to meet aggregate minimum retirement expenditures–defined as a combination of basic expenses from the Bureau of Labor Statistics' Consumer Expenditure Survey and some health insurance and out-of-pocket health-related expenses, plus expenses from nursing home and home health care expenses, at least until the point they are picked up by Medicaid.