The Future Shock of Retirement

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Co-authored with Jonathan Cohen and Matthew O’Hara, this BGI research study uses data from the Health and Retirement Study to model the impact of realistic shocks to Social Security benefits and home equity values on actual retirement readiness across American households. The study finds that among middle-wealth households, Social Security and home equity together represent roughly 40% of total expected retirement wealth — assets that are more precarious than most retirement planning assumptions acknowledge.

The study’s central finding is that when these two asset categories are marked to more realistic scenarios, approximately half of middle-income Americans face a reduction of 25% or more in their expected retirement wealth. Scanlan and his co-authors propose responses at the government, employer, and individual levels, and warn against the behavioral tendency to count illiquid home equity as readily spendable retirement income. The study attracted wide coverage including in PlanSponsor and shaped Scanlan’s subsequent congressional testimony on retirement security.