BOSTON--(BUSINESS WIRE)--

Fidelity Investments, the leader in helping Americans save for retirement1, today unveiled its Retirement Savings Assessment, the first industry analysis that provides actionable and quantifiable steps across three generations (Baby Boomers born between 19461964, X born between 19651978 and Y born between 1979 1991) to potentially help close their estimated retirement income gaps.

The research finds working American households may experience a potential income drop of 28 percent in retirement2, and nearly four-in-ten (38 percent) retiree households report not having sufficient income to cover their monthly expenses. These estimated retirement income gaps could force significant sacrifices that could include cuts in discretionary expenses. To help improve Americans retirement readiness, Fidelity conducted an analysis that quantifies the potential monetary benefits of five straight-forward steps such as adjusting asset allocation and annuitizing retirement assets. Within the context of a comprehensive retirement plan, this analysis can help individuals better understand which steps may make the greatest impact.

While there is evidence that Americans are saving more for retirement, our analysis finds that they need to take additional steps to prepare for the future and take better control of their personal economy, said Kathleen A. Murphy, president, Personal Investing, Fidelity Investments. The study underscores the importance of early engagement in the retirement planning process and the potential impact these five actionable steps can have in helping address the retirement income gap that many Americans are facing today.

Five Steps That Can Improve Monthly Income in Retirement

Based on the analysis, Fidelity modeled five steps for three generations (Baby Boomers, X and Y) to determine the potential impact on future retirement income. The steps, which are actions often considered when developing and implementing a comprehensive retirement plan, include a mix of strategies that can be taken now, whether an investor is working or in retirement:

Most Americans have the potential to get significantly closer to achieving their retirement goals, but they have to take action and consider implementing a mix of these five steps, said Murphy. Whether youre a younger investor deciding to save a little more in a 401(k) or an older investor adjusting investment plans, its never too early or too late to impact your personal economy and take steps to improve your retirement readiness.

To help Americans take steps to improve their current retirement plan, Fidelity published a Viewpoints article today titled Dont take a lifestyle cut in retirement. The article outlines the five steps and the hypothetical impact of each for a Baby Boomer and Generation X household.

As highlighted within the Viewpoints article, the following hypothetical example outlines the profile of a Generation X household, based on the age groups survey responses4. This generation reported an estimated need of $4,900 in monthly retirement income. Based on their current household salary of $74,000 and the amount currently saved for retirement, Fidelity estimates these households will have approximately $3,200 in monthly retirement income, which represents a shortfall of $1,700 a month (see chart for complete methodology). After applying all five steps to the Generation X household, the estimated retirement income shortfall could be completely erased. The accompanying graphic depicts the potential impact of each step individually and also if taken together (For all generational graphics, please click here):

About the Generation X Graphic Methodology

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Fidelity Retirement Savings Assessment Finds Working Americans Facing Significant Drop in Income in Retirement