The calculation of households prepared to transition into retirement has been operating off of a flawed metric, 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).
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.
The brief relates that this concern could also lead to rethinking the long-held preconception that a “large proportion” of new retirees are generally ill-prepared for making the transition out of work. 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
