Morningstar Retirement Launches New Morningstar Model of US Retirement Outcomes
Morningstar Retirement, part of Morningstar, Inc. (Nasdaq: MORN), has launched the Morningstar Model of U.S. Retirement Outcomes, a simulation tool assessing retirement income sufficiency. Key findings from the model reveal:
1. 57% of those not participating in future defined-contribution plans may face retirement shortfalls, compared to 21% for those with 20+ years of participation.
2. Approximately 45% of American households are predicted to run short of money in retirement.
3. 55% of single females may be at risk in retirement, compared to 41% of couples and 40% of single males.
4. Socioeconomic disparities exist, with 61% of Hispanic Americans and 59% of non-Hispanic Black Americans projected to face shortfalls.
5. Delaying retirement can significantly reduce risk: 54% at age 62, 45% at 65, 38% at 67, and 28% at 70.
Morningstar Retirement, parte di Morningstar, Inc. (Nasdaq: MORN), ha lanciato il Modello Morningstar dei Risultati di Pensionamento negli Stati Uniti, uno strumento di simulazione per valutare l'adeguatezza del reddito pensionistico. I principali risultati del modello rivelano:
1. Il 57% di coloro che non partecipano a piani di contribuzione definita futuri potrebbero affrontare brecce pensionistiche, rispetto al 21% per coloro con oltre 20 anni di partecipazione.
2. Circa il 45% delle famiglie americane si prevede che esauriranno le proprie risorse finanziarie in pensione.
3. Il 55% delle donne single potrebbe essere a rischio in pensione, rispetto al 41% delle coppie e al 40% degli uomini single.
4. Esistono disparità socio-economiche, con il 61% degli Americani ispanici e il 59% degli Americani neri non ispanici proiettati ad affrontare carenze.
5. Ritardare il pensionamento può ridurre significativamente il rischio: 54% a 62 anni, 45% a 65, 38% a 67 e 28% a 70.
Morningstar Retirement, parte de Morningstar, Inc. (Nasdaq: MORN), ha lanzado el Modelo Morningstar de Resultados de Jubilación en EE. UU., una herramienta de simulación que evalúa la suficiencia de ingresos para la jubilación. Los hallazgos clave del modelo revelan:
1. El 57% de aquellos que no participan en futuros planes de contribución definida podrían enfrentar déficits en su jubilación, en comparación con el 21% de aquellos con más de 20 años de participación.
2. Se predice que aproximadamente el 45% de los hogares estadounidenses quedarán sin dinero en la jubilación.
3. El 55% de las mujeres solteras pueden estar en riesgo en su jubilación, en comparación con el 41% de las parejas y el 40% de los hombres solteros.
4. Existen disparidades socioeconómicas, con el 61% de los estadounidenses hispanos y el 59% de los estadounidenses negros no hispanos proyectados a enfrentar déficits.
5. Retrasar la jubilación puede reducir significativamente el riesgo: 54% a los 62 años, 45% a los 65, 38% a los 67 y 28% a los 70.
모닝스타 리타이어먼트(Morningstar Retirement)는 모닝스타, Inc. (나스닥: MORN)의 일부로, 미국 노후 결과에 대한 모형인 모닝스타 모델을 출시했습니다. 이 시뮬레이션 도구는 노후 소득의 충분성을 평가합니다. 모델의 주요 발견은 다음과 같습니다:
1. 57%의 향후 확정 기여(plans)에 참여하지 않는 사람들은 은퇴 시 재정 부족을 겪을 수 있으며, 20년 이상 참여한 사람의 경우는 21%입니다.
2. 약 45%의 미국 가정이 노후 자금이 부족할 것으로 예상되고 있습니다.
3. 55%의 독신 여성은 은퇴 후 위험에 처할 수 있으며, 이는 부부의 41%과 독신 남성의 40%에 비해 높은 수치입니다.
4. 사회경제적 차이가 존재하며, 61%의 히스패닉 미국인 및 59%의 비히스패닉 흑인 미국인이 재정 부족에 직면할 것으로 예상됩니다.
5. 은퇴를 연기하면 위험을 상당히 줄일 수 있습니다: 62세에 54%, 65세에 45%, 67세에 38%, 70세에 28%입니다.
Morningstar Retirement, partie de Morningstar, Inc. (Nasdaq: MORN), a lancé le Modèle Morningstar des Résultats de Retraite aux États-Unis, un outil de simulation pour évaluer la suffisance des revenus de retraite. Les principales conclusions du modèle révèlent :
1. 57% de ceux qui ne participent pas à des plans de contribution définie futurs pourraient faire face à des déficits de retraite, contre 21% pour ceux ayant plus de 20 ans de participation.
2. Environ 45% des ménages américains devraient manquer d'argent à la retraite.
3. 55% des femmes seules pourraient être à risque à la retraite, comparé à 41% des couples et 40% des hommes seuls.
4. Il existe des disparités socio-économiques, avec 61% des Américains hispaniques et 59% des Afro-Américains non hispaniques projetés pour faire face à des déficits.
5. Retarder la retraite peut réduire considérablement le risque : 54% à 62 ans, 45% à 65, 38% à 67 et 28% à 70.
Morningstar Retirement, Teil von Morningstar, Inc. (Nasdaq: MORN), hat das Morningstar-Modell der Rentenergebnisse in den USA eingeführt, ein Simulationswerkzeug zur Bewertung der Renteneinkommenssuffizienz. Die wichtigsten Ergebnisse des Modells zeigen:
1. 57% derjenigen, die nicht an zukünftigen Beitragsplänen teilnehmen, könnten mit Rentenlücken konfrontiert werden, im Vergleich zu 21% für diejenigen mit über 20 Jahren Teilnahme.
2. Etwa 45% der amerikanischen Haushalte wird voraussichtlich in der Rente knapp werden.
3. 55% der alleinstehenden Frauen könnten in der Rente gefährdet sein, verglichen mit 41% der Paare und 40% der alleinstehenden Männer.
4. Es bestehen sozioökonomische Ungleichheiten, wobei 61% der hispanischen Amerikaner und 59% der nicht-hispanischen schwarzen Amerikaner voraussichtlich mit Kürzungen konfrontiert werden.
5. Eine Verschiebung des Renteneintritts kann das Risiko erheblich verringern: 54% mit 62 Jahren, 45% mit 65, 38% mit 67 und 28% mit 70.
- Launch of the Morningstar Model of U.S. Retirement Outcomes, a new simulation tool for assessing retirement income sufficiency
- Identification of actionable insights for policymakers and plan sponsors to improve product design
- Potential for future use of the model to inform debates on enhancing retirement outcomes
- 57% of workers without future defined-contribution plan participation may face retirement shortfalls
- 45% of American households predicted to run short of money in retirement
- Significant socioeconomic disparities in retirement readiness, with higher risks for Hispanic and non-Hispanic Black Americans
- Higher risk of retirement shortfalls for baby boomers (52%) and Gen X (47%) compared to younger generations
Insights
The launch of Morningstar's new Model of US Retirement Outcomes is a significant development in the retirement planning industry. This sophisticated simulation tool could potentially reshape how retirement adequacy is assessed and addressed in the United States.
From an investor's perspective, this model's findings have several implications:
- Defined-contribution plans are crucial: The stark contrast in retirement shortfall risk between those with and without future defined-contribution plan participation (
21% vs57% ) underscores the importance of these plans. This could drive increased demand for companies offering robust 401(k) plans, potentially benefiting firms in the financial services sector. - Demographic disparities: The model's revelation of significant retirement risk disparities across gender, race and generation could lead to targeted policy changes and new financial products. This may create opportunities for companies that can address these specific demographic needs.
- Retirement age impact: The substantial reduction in shortfall risk by delaying retirement (from
54% at age 62 to28% at age 70) could influence workforce dynamics and potentially affect industries relying on older workers.
For Morningstar (NASDAQ: MORN), this model could strengthen its position in the retirement research and advisory space, potentially driving growth in its retirement solutions segment. However, the real value lies in how this tool might influence policy decisions and industry practices, which could have far-reaching effects on the entire financial sector.
Morningstar's new retirement model is a game-changer in understanding the complexities of retirement planning in the US. Its granular approach, considering individual characteristics, healthcare costs and longevity, provides a more nuanced view of retirement readiness than previously available.
Key market implications include:
- Product development opportunities: The model's findings highlight gaps in retirement preparedness, especially among certain demographics. This could spur innovation in financial products tailored to these underserved segments, creating new market opportunities.
- Shift in retirement services: With the model emphasizing the importance of employer-sponsored plans, we might see increased demand for retirement plan administration services and related technologies. Companies in this space could see significant growth.
- Policy influence: The model's ability to simulate various scenarios could make it a powerful tool for policymakers. Any resulting policy changes could reshape the retirement landscape, affecting everything from Social Security to tax-advantaged savings accounts.
Moreover, the model's focus on improving participation rates and plan features like auto-enrollment and emergency savings accounts could drive changes in how employers structure their benefits packages. This could create ripple effects across the human resources and benefits management industries.
In essence, while this model is a research tool, its potential to influence policy, product development and market dynamics makes it a significant development for investors to watch.
Morningstar's new Model of US Retirement Outcomes is a pivotal development in retirement policy research. Its comprehensive approach, incorporating individual characteristics, healthcare costs and longevity projections, provides a more accurate picture of retirement readiness than previous models.
Key policy implications include:
- Urgency for expanded plan access: With
57% of those without future defined-contribution plan participation at risk of retirement shortfalls, there's a clear need for policies to expand access to these plans, particularly for small businesses and gig economy workers. - Addressing demographic disparities: The significant gaps in retirement risk across gender and racial lines (
55% for single females,61% for Hispanic Americans,59% for non-Hispanic Black Americans) highlight the need for targeted policy interventions to address these inequalities. - Generational challenges: The higher risk for Baby Boomers and Gen X (
52% and47% respectively) compared to younger generations underscores the need for policies to help older workers catch up on retirement savings. - Retirement age considerations: The substantial reduction in shortfall risk by delaying retirement could influence debates around Social Security retirement age and policies to support longer working lives.
This model's ability to simulate various scenarios could make it a powerful tool for policymakers to test the potential impacts of different retirement policies. It could lead to more evidence-based policymaking in areas such as tax incentives for retirement savings, auto-enrollment mandates and reforms to Social Security and Medicare.
For investors, understanding these potential policy directions is crucial, as they could significantly impact the retirement landscape and, by extension, the financial services industry and broader economy.
Using the model, Morningstar researchers found workers without future defined-contribution plan participation are over twice as likely to run short of money in retirement
“The model paints a clear picture: Participating in an employer-sponsored defined-contribution plan significantly lowers the risk of retirement shortfalls,” said Spencer Look, the report’s lead author and associate director of retirement studies for the Morningstar Center for Retirement & Policy Studies. “Our model not only sets a new standard in retirement research, but we’ll be able to identify actionable insights for policymakers and plan sponsors to improve product design, all with the goal of helping more Americans reach their retirement goals.”
The research report, “Beyond the Retirement Crisis Headlines: Why Employer-Sponsored Plans Are the Key to Retirement Adequacy for Today's Workers,” suggests that certain demographics may be more likely to run short of money in retirement due to variables such as their current retirement savings, levels of financial resources, existing disparities in retirement account balances, and whether they participate in a defined-contribution plan. Takeaways from the report include:
-
When comparing retirement funding ratios for Gen Z, millennials, and Gen X households in
the United States , the research finds57% of those who do not participate in a defined-contribution plan in the future may not be able to sustain projected retirement expenses, compared with21% for those with at least 20 years of future participation. The career-long 401(k) participants who are at risk likely cash out their balances upon a job change or deplete their accounts via pre-retirement withdrawals. -
Across the
U.S. , the model predicts approximately45% of American households will run short of money in retirement. Moreover, about55% of single females may be at risk in retirement, compared with41% of couples and40% of single males. -
A socioeconomic disparity exists:
61% of Hispanic Americans and59% of non-Hispanic Black Americans are projected to run short of money, compared with approximately40% for both non-Hispanic other Americans and non-Hispanic white Americans. -
Nearly
54% ofU.S. households could experience retirement shortfalls if they retire at 62 years old, compared with45% if retiring at 65. This can be improved by waiting until age 67 (38% ) or age 70 (28% ). -
Looking across generations, baby boomers and Gen X have a higher risk of experiencing retirement shortfalls (
52% and47% , respectively) compared with millennials (44% ) and Gen Z (37% ). The shift from defined-benefit pensions to defined-contribution plans left baby boomers and Gen X with less time to accumulate savings. Younger generations, moreover, benefit from more recent features like automatic enrollment, managed accounts, and target-date funds. - The retirement industry should focus on providing more Americans with access to an employer-sponsored plan and improve participation rates for those who already have access. Plan sponsors should consider adding auto-enrollment and additional features to a plan, such as a student loan match or an emergency savings account, to boost participation.
The Morningstar Model of
The Morningstar Model of
About The Morningstar Center for Retirement & Policy Studies
The Morningstar Center for Retirement & Policy Studies has the mission to help improve the
About Morningstar Retirement
Morningstar Retirement empowers investor success by providing research- and technology-driven products and services that help individuals reach their retirement goals. With advisory services provided by Morningstar Investment Management LLC, Morningstar Retirement supports and collaborates with workplace retirement plans and other industry players to differentiate their services, stay competitive, and reach new markets, all in service of building a better retirement system. Morningstar Retirement not only helps people save for the retirement they want but helps them make their money last once they get there.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment insights in
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FAQ
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What percentage of American households are predicted to run short of money in retirement according to the Morningstar Model?
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What socioeconomic disparities in retirement readiness were identified by Morningstar's Model?
