The calculation of households prepared to transition into retirement has been operating off of a flawed estimate of retirement income in United States Census Bureau data, with numbers actually showing that more are prepared for the transition out of work than originally believed. This is one of the primary conclusions underlying a new brief released by the Center for Retirement Research at Boston College (CRR).
The speculation that some census data paints an incorrect picture of the real situation, the brief notes, “has led some to question prior work suggesting that a large proportion of the population is ill-prepared for retirement.”
Based on a 2017 research paper by Adam Bee and Joshua Mitchell, members of the U.S. Census Bureau, the brief looks at data analyses from five different sources: the Current Population Survey (CPS), the triennial Survey of Consumer Finances (SCF), the Health and Retirement Study (HRS), the Survey of Income and Program Participation (SIPP), and the Panel Study of Income Dynamics (PSID).
Data yielded from these sources is then compared with administrative records from both the Internal Revenue Service (IRS) and Social Security Administration (SSA). The original paper by Bee and Mitchell has renewed concern that the CPS’ income measurements are inaccurate, which has caused that concern to spread to other estimates of retirement income from other survey datasets.
While this research would seem to indicate that the CPS may not be particularly reliable for this information, the SCF, HRS, PSID, and SIPP are still well-founded sources since their data tends to align more closely with the administrative figures from the IRS and SSA.
For a more detailed breakdown of the information, you can read the full CRR brief by clicking here.
Written by Chris Clow