Thursday, January 8, 2015

Preparing for Adequate Retirement Income: How Close Are Retirees in Herkimer County to the 70% Rule?

A recent article by dealt with measuring people's fiscal preparedness for retirement. The study used income statistics from the Census Bureau’s American Community Survey to compare how those of residents age 65 and over are faring against pre-retirement households led by those 45 to 64. chose that comparison because, as they put it, "a rough rule of thumb is that you’ll need at least 70% of your pre-retirement income once you stop working. Some people will need more, of course, but few will be able to get by on less."

What they found was that "Older Americans are making slow but steady gains in income compared with their younger counterparts, but they are still falling short of the levels needed for a healthy retirement in all but one state. It's clear that, nearly everywhere in the country, older Americans still don’t have the kind of money coming in they need for a secure and comfortable retirement,” says Mike Sante, managing editor of

Below is a map of the US that they presented showing the "replacement income ratio" of each state. This replacement ratio is basically the median income of households where the householder is age 65 and over, divided by the median income of households age 45 to 64.Ideally it should be 70% or higher based on the 70% rule mentioned above. New York happens to come in at 54.98%.

Here is a table showing the Replacement Rate for Herkimer County based on the 2012 Five Year ACS Estimates showing the median household incomes for both types of householders (65+, and 44 to 64 years of age) as well as their replacement income ratio. Again, remember that the supposed goal is for older householders to make 70% or more of their slightly younger counterparts. The closer the rank to "1" the higher the county replacement rate. None of the 62 counties reached the 70% rate using the 2012 Five Year ACS Estimates data.