No Social Security? U.S. retirement gap would increase to $7.9 trillion this year

To illustrate how important Social Security to Americans' ability to afford retirement, EBRI also estimates that if the program were to be eliminated this year, the aggregate national retirement deficit would increase by nearly 90 percent, to $7.87 trillion.

"The analysis demonstrates the extreme importance of longevity risk (the higher costs of living a long time) and nursing home and home health care costs in simulating retirement savings shortfalls," says Jack VanDerhei, EBRI research director and author of the report, "Ignoring nursing home and home health care costs (or assuming another entity pays these costs) decreases the RSS by an average of 74 percent whereas the shortfalls for those in the latest relative longevity quartile average 14.8 times those in the earliest relative longevity quartile."

Among the study's other findings:

• For those on the verge of retirement (early baby boomers), retirement savings deficits vary from $19,304 (per individual) for married households to $33,778 for single males and $62,734 for single females.

• RSS values for early boomers vary from $71,299 (per individual) for married households, increasing to $93,576 for single males and $104,821 for single females.

• RSS values for Gen Xers assumed to have no future years of defined contribution plan eligibility is $78,297 per individual. That shortfall decreases substantially (to $52,113) for those with one to nine years of future eligibility; and to $32,937 for those with 10–19 years of future eligibility. 

See the chart on the next page for a comparison of retirement savings shortfalls by age group and gender.