Are You Really Behind on Retirement? 2 Studies Disagree (46% vs. Under 20%)

Full analysis

Two widely cited studies reach opposite conclusions about how many Americans are falling short on retirement savings — roughly 46% vs. fewer than 20% — and host Taylor Schulte argues the gap reveals a flaw in how retirement readiness is typically measured. Families in high-cost child-rearing years look dangerously behind by conventional yardsticks, but the empty-nest decade can be a powerful catch-up window if the freed-up cash flow is redirected deliberately rather than absorbed into lifestyle.

What was covered

• The two studies compared. The Center for Retirement Research at Boston College's National Retirement Risk Index has averaged 46% of working households "at risk" since 2004 (the most recent update puts it at 39%, lifted partly by higher home values). A 2006 Journal of Political Economy study built a life-cycle model accounting for taxes, Social Security, pensions, and changing family expenses, and found fewer than 20% of households were actually behind their savings target — and most gaps were small.

• Why the studies disagree. The Boston College index asks whether a household can replace enough pre-retirement income to maintain its current standard of living. That framing overstates the problem when today's spending is swollen by children at home. The academic study allows income, taxes, and spending needs to change over time — a more realistic but less visible picture.

• Three ways the "save a fixed percentage" rule breaks down. Drawing on research by financial planner Michael Kitces: (1) lifestyle creep — spending rises but the savings rate doesn't; (2) a big raise — income jumps but savings stay flat; (3) children — Schulte cites national estimates that raising one child from birth through 17 costs a middle-income family roughly $310,000 on average, not counting college.

• The empty-nest catch-up window. When child-related expenses end, spending can fall sharply while earnings are near their peak. Schulte's illustrative example: a couple frees up $3,000/month when the last child leaves at their early 50s, then an additional $2,000/month when the mortgage is paid off five years later. Investing $3,000/month for five years, then $5,000/month for ten more, at an 8% average annual return produces roughly $1.4 million — $1.2 million at 6% — starting from zero at age 50.

• Catch-up contribution rules. Schulte notes that at age 50 workers can make additional catch-up contributions to workplace plans and IRAs. Under SECURE Act 2.0, ages 60–63 have access to a larger catch-up amount. (Specific dollar limits were not stated in the episode.)

• Risks that can close the window. A health setback, layoff, or caregiving responsibility in the 50s or early 60s can shorten or eliminate the catch-up period. Later-in-life parenthood is also pushing the empty-nest window closer to retirement: the CDC's average age of first-time mothers rose from about 21 in 1970 to nearly 28 today.

Notable claims & predictions

• Taylor Schulte on the 46% figure: "Over time, almost five out of every 10 working households have been considered at risk of falling short in retirement" — but that index measures shortfall against current spending, which may be inflated by child-rearing costs that will disappear.

• Schulte on the guilt aimed at parents: "Saving very little or even nothing for retirement during certain years of raising a family is more normal than traditional retirement advice might lead you to believe."

• Schulte on the empty-nest opportunity: "A couple that struggled to save 5% of their income may suddenly have room to save 20, 30, or even 40%, sometimes without reducing the lifestyle they actually enjoy."

• Schulte's warning on the biggest real risk: "The bigger risk for families is simply letting those first few empty-nest years pass without making a conscious decision about what to do with the extra cash flow. Once that money gets absorbed into a higher level of spending, it can be really difficult to pull it back."

• Schulte on Social Security full retirement age: "Social Security's full retirement age is now 67 for anyone born in 1960 or later" — cited as evidence that the catch-up window exists even for late parents.

Fact check

"Raising one child from birth through age 17 costs a middle-income family around $310,000 on average after adjusting for inflation." Schulte attributes this to "recent national estimates" without naming a specific source. The most commonly cited benchmark is the USDA's Expenditures on Children by Families report, last updated for the 2015 data year, which put the figure at roughly $233,000 before subsequent inflation. Inflation since then does push the figure higher, and various updated analyses have landed near or above $300,000, so the ballpark is defensible — but without a named, current source, readers should treat it as an approximation rather than a precise finding.

The 2006 Journal of Political Economy study finding fewer than 20% behind. Schulte describes it accurately as a life-cycle model that accounts for taxes, Social Security, pensions, and longevity. That study (by Scholz, Seshadri, and Khitatrakun) is real and well-regarded. However, it is now nearly two decades old. Retirement-system changes since 2006 — the decline of defined-benefit pensions, rising healthcare costs, lower long-term interest rates — mean its conclusions may be less applicable today than Schulte implies. The episode does not flag this.

The 8% average annual return assumption in the catch-up example. Schulte does acknowledge it is "a long run average, not a promise" and that 15 years leaves less margin than 40 years. That's fair. Worth adding: an 8% nominal return assumption is on the optimistic end for a diversified portfolio over a 15-year horizon and could materially overstate results if returns are lower or sequence of returns is unfavorable near retirement.

Social Security full retirement age of 67 for those born in 1960 or later. Accurate.

SECURE Act 2.0 enhanced catch-up for ages 60–63. Accurate as described — that provision does create a higher catch-up limit for that age band.

Why this matters for you

• If you're in your 50s and feel behind, recalculate with forward-looking numbers. The standard retirement readiness benchmarks compare today's balance to today's spending — but if you still have kids at home or a mortgage, today's spending is likely the peak, not the baseline. Ask a planner what your projected spending looks like after those costs drop, not just what it is now.

• The empty-nest transition is a financial decision point, not just a life milestone. Schulte's core practical warning: decide in advance what to do with the cash flow that will be freed up when child-related expenses end. If you wait, spending tends to expand automatically to fill the gap. Earmark a specific monthly amount for retirement contributions before the money is absorbed elsewhere.

• Ages 60–63 carry an extra contribution opportunity under SECURE Act 2.0. If you're approaching that window, confirm with your plan administrator what the enhanced catch-up limit is for your workplace plan in the current year — it is larger than the standard over-50 catch-up.

• The catch-up math depends on time. Schulte's example requires 15 years of consistent investing. If you are already past 60, or if a health event, layoff, or caregiving duty could interrupt earnings, the window is narrower than the illustration suggests. The earlier you act once expenses fall, the more the math works in your favor.