In The 'Green' Zone

Good News: America’s Retirement Score Is Improving

Millennials Catching up to Generation X in Terms of Retirement Preparedness

Half of Savers Are at Risk of Not Fully Covering Essential Retirement Expenses

New research from Fidelity’s Retirement Savings Assessment. Visit here.

January 31, 2018 — BOSTON–According to Fidelity Investments®’ biennial Retirement Savings Assessment study, American savers have steadily improved their retirement preparedness, with America’s retirement score1 at an all-time high of 80, meaning the typical saver is on target to have 80 percent of the income Fidelity estimates they will need to cover retirement costs. This is a significant improvement from when the study was first conducted in 2005 when the score was 62.

Even with this improvement, the study reveals half of those surveyed are at risk of not being able to fully cover essential expenses2 in retirement. Fidelity’s Retirement Savings Assessment is built upon comprehensive data from more than 3,100 survey responses that are run through the extensive retirement planning platform Fidelity uses every day with customers3. The end result: a numerical indicator showing whether savers are on target to meet their estimated income needs. The score places households into four categories (linked to a numerical range) on the retirement preparedness spectrum, based on a household’s ability to cover all of their estimated retirement expenses in a down market4.

Generational Shift: Millennials’ Retirement Score Catches Up with Generation X

One thing that makes Fidelity’s score unique is its ability to enable comparative views of preparedness across generations.

“Millennials are clearly putting money aside for retirement and taking more control of their personal situations to ensure a financially-secure future,” said Ken Hevert, senior vice president of Retirement at Fidelity. “While younger generations typically don’t have jobs with access to pensions as a source of guaranteed retirement income, there are many actions that can be taken to improve retirement readiness, including saving more, managing debt and making smart investment decisions. For the average saver—regardless of age or income level—these findings demonstrate the positive impact of knowing where you stand and taking appropriate actions to get on the path to retirement readiness.”

What’s Moving Investors Closer to Green?

One encouraging sign: the 2018 Retirement Score suggests the average household is only one point away from moving into the “green zone,” meaning most savers will be on track to cover essential expenses in retirement. Why?

  • Investors are saving more
    This improvement is driven largely by a higher median savings rate: now at 8.8 percent7, up significantly from 3.6 percent in 2006. Boomers saved the most, stashing away 9.9 percent of their salaries, an increase from 9.7 percent in 2016. Millennials held steady at 7.5 percent. Despite this, both are well below Fidelity’s suggested total savings rate of at least 15 percent8, including employer contributions.
  • But, asset allocation still needs work
    The percentage of respondents allocating their assets in a manner Fidelity considers age appropriate9 held fairly steady at 55 percent, compared to 57 percent in 2016. This is, however, a notable improvement over 2006 levels, when less than half—48 percent—allocated their assets in an age-appropriate manner. One reason: this past decade, many workplace retirement plans have begun defaulting employees into target date funds and managed accounts.

Getting to Green: Three Accelerators to Improve Retirement Readiness

Many people may not be planning adequately for retirement because they are unsure where to start or are concerned their personal retirement income goal may be unattainable. However, the findings clearly demonstrate actions individuals easily can take to gain better control over their financial future and boost retirement preparedness.

the average household is only one point away from moving into the “green zone,” meaning most savers will be on track to cover essential expenses in retirement

“The fact that the Retirement Score moves so dramatically when all three ‘accelerators’ are applied is a clear demonstration of the profound impact simple steps can have on retirement preparedness,” said Hevert. “While these actions taken separately are clearly helpful, taking steps to improve your preparedness on several fronts can have a multiplier effect, which could help bring you from good to great. Everyone’s situation is different, so it’s important to take steps that make sense for you—retiring later may not be an option, for example, in which case, it may make more sense to re-evaluate how much you plan to spend in retirement.”

HSA and RSA: The Health Care Connection

As study after study has shown, the cost of health care in retirement has become an increasingly looming concern for many, and the growing popularity of tax-advantaged health savings accounts (HSA) has become one solution poised to meet this need, for those who have it available as an option. According to this year’s Retirement Savings Assessment, respondents who report having HSAs tend to have higher Retirement Scores: households with an HSA have a score of 84; those without have a score of 79. Although this does not provide definitive proof of a causal relationship between having an HSA and one’s Retirement Score, the evidence strongly suggests taking advantage of this savings vehicle, if you have access to one, is good for your overall financial position and indicative of good savings habits, regardless of income level.

Wondering Where You Stand? Check out the Fidelity Retirement ScoreSM

Every individual’s retirement vision is unique and to help investors know where they stand, Fidelity offers the Fidelity Retirement Score, a numerical indicator showing individual investors if they are on track to have the income amount Fidelity estimates they may need in retirement. Fidelity customers and those who sign up for guest access can get their score in the Planning and Guidance Center. A high-level version of the score is also available to everyone at by answering just six short questions. Both tools also allow savers to easily model changes to see how that may impact their score and view steps for improving retirement preparedness based on their score.

In addition, Fidelity offers a variety of resources:

Educational Fidelity Viewpoints® articles, including “Do your retirement savings measure up?” that provides specific suggestions by generation, based upon which color category you fall into, “The three A’s of successful saving” and a Retirement Roadmap Special edition devoted exclusively to retirement planning., which is designed for younger investors and offers videos, infographics and articles on topics related to budgeting, saving, investing and more, including a video weighing the financial ramifications of paying off student loan debt or saving for retirement and an infographic showing the impact of saving one percent more.

Seminars and online learning modules to help learn about key retirement issues and how to prepare for them.
Plan for Life, targeted to Fidelity’s workplace retirement plan employees, which delivers personalized experiences to engage, educate, and drive employees to take simple steps toward improving their financial future, today and into retirement.

Want to Know Where You Stand? Check out the Fidelity Retirement ScoreSM




About the Fidelity Investments Retirement Savings Assessment
The findings in this study are the culmination of a year-long research project with Strategic Advisers, Inc.—a registered investment advisor and a Fidelity Investments company—that analyzed the overall retirement preparedness of American households based on data such as workplace and individual savings accounts, Social Security benefits, pension benefits, inheritances, home equity and business ownership. The analysis for working Americans projects the retirement income for the average household, compared to projected income need, and models the estimated effect of specific steps to help improve preparedness based on the anticipated length of retirement.
Data for the Fidelity Investments Retirement Savings Assessment were collected through a national online survey of 3,182 working households earning at least $20,000 annually with respondents age 25 to 74, from September 14 through October 3, 2017. All respondents expect to retire at some point and have already started saving for retirement. Data collection was completed by GfK Public Affairs and Corporate Communication using GfK’s KnowledgePanel®, a nationally-representative online panel. The responses were benchmarked and weighted against the 2016 Current Population Survey by the Bureau of Labor Statistics. GfK Public Affairs and Corporate Communication is an independent research firm not affiliated with Fidelity Investments. Fidelity Investments was not identified as the survey sponsor.
Fidelity’s Retirement Score is calculated through the proprietary asset-liability modeling engine of Strategic Advisers, Inc., which has been providing asset allocation, retirement and tax-sensitive investment management services to Fidelity’s individual and institutional clients for two decades. Of note, Fidelity continually enhances and evolves the retirement readiness methodology, guidance tools and product offerings. This year’s survey processing include enhancements including, but not limited to, demographic weighting, retirement income projections and social security estimates. To enable a direct comparison, the previously-reported Retirement Score results were recalculated using the enhanced methodology.
This analysis is for educational purposes and does not reflect actual investment results. An investor’s actual account balance and ability to withdraw assets during retirement at any point in the future will be determined by the contributions that have been made, any plan or account activity, and any investment gains or losses that may occur. For more information on Fidelity Investments® Retirement Savings Assessment, an executive summary can be found on
About Fidelity Investments
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $6.8 trillion, including managed assets of $2.4 trillion as of December 30, 2017, we focus on meeting the unique needs of a diverse set of customers: helping more than 26 million people invest their own life savings, 23,000 businesses manage employee benefit programs, as well as providing more than 12,500 financial advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for 70 years, Fidelity employs more than 40,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit


This number represents the median RPM score derived from the Retirement Savings Assessment.
The survey assumes that 80 percent of estimated retirement expenses are essential.
Fidelity’s planning tools are powered by its Asset-Liability Modeling (ALM) engine.
Fidelity uses an underperforming market for planning projections based on Monte Carlo simulations and its asset liability model. Underperforming market conditions mean that in 9 out of 10 market scenarios the hypothetical portfolio performed at least as well, while 1 out of 10 times the hypothetical portfolio failed to perform as well. Using underperforming markets as a planning measure leads to conservative results. Using a lower confidence level would improve results, but also increase the risk that investors would fall short of projections.
5 Previously-reported 2016 numbers have been recalculated for a fair comparison.
These numbers represent the median RPM scores by generation, based on the average age of household.
This number represents the median savings rate reported by respondents and may include an employer match. The savings rate is defined as total household savings divided by total household annual, pre-tax income.
8 The rule of thumb of saving at least 15 percent assumes no pension income. It may include an employer match as well and not simply an individual’s own contribution.
Asset allocation involves investing in the right mix of stocks and fixed-income investments to align with one’s risk-tolerance, age and time horizon. “Appropriate” refers to what Fidelity considers to be an appropriate mix, based on data reported in the Retirement Savings Assessment about an individual’s equity allocation distribution that is placed into four categories, based on that person’s age. Those categories are “On track”: within 25 percent on target date equity allocation; “Aggressive”: an equity percentage more than 25 percent above the age-appropriate target equity; “Conservative”: an equity percentage less than 25 percent below the age-appropriate equity target; as well as a category for assets held in a Target Date Fund.
10 As defined by the Social Security Administration website. Fidelity has not been involved in the preparation of the content supplied at this unaffiliated site and does not guarantee or assume any responsibility for its content.
11 The basis for this increase: comparing one’s Social Security income at full retirement age of 67 against one’s projected Social Security income at the “early eligibility age” of 62. If you can wait even longer to collect your Social Security benefit, you will be eligible for delayed retirement credits which will increase your benefit an additional eight percent each year up until age 70 (for those born after 1942).