Fidelity has launched the Fidelity Investments Retirement Preparedness Measure (RPM), based on data from Fidelity's 2013 Retirement Savings Assessment survey. It is a measure of whether working Americans are on track to cover their estimated total post-retirement expenses. It introduces — for the first time — a single score that provides a comparison across generations, combining comprehensive survey data with the retirement planning methodology Fidelity makes available to its customers.
Under the RPM, working Americans fall into four categories on the retirement preparedness spectrum: poor, fair, good and very good. The categories are linked to a numeric range (the higher the better), based on an individual's ability to cover estimated retirement expenses, even in a down market.
According to the RPM, many Americans are likely to fall short of meeting their retirement income goals, unless they act soon. In fact, the median score indicates working Americans are on track to meet just 74% of their estimated retirement expense goals and face a 26% income gap, placing them in the "yellow zone" and forcing them to make spending cuts in retirement that may diminish their quality of life — especially if the market experiences a severe downturn. There are six “accelerators” or factors that can increase an individual’s score on the Retirement Preparedness Measure by 42% if applied all together.
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