The Adequacy of Household Saving

DURING THE PAST half century, retirement income security in the United States has been based on a combination of social security, employersponsored pensions, and households' own saving.Social security was intended to provide a retirement income base.Pensions generated additional retirement income.Households' own saving supplemented these sources.In many ways this combination has served retirees well, but recent and impending developments have raised concerns about the adequacy of households' preparations for retirement. 1 Social security faces a long-term financial imbalance, owing to lengthening life spans, earlier retirement, and, over the next few decades, the demographic bulge created by the retirement of the baby boom generation.