The Center for Retirement Research at Boston College has released “The Impact of Interest Rates on the National Retirement Risk Index,” by Alicia H. Munnell, Anthony Webb, and Rebecca Cannon Fraenkel.
The brief’s key findings are:
- The National Retirement Risk Index shows that changes in interest rates have only a modest effect on retirement preparedness for three reasons:
- Most households have relatively little financial wealth to annuitize.
- The effect on annuity income is muted, because the principal portion of the annuity payout is unaffected by interest rates.
- Changes in the annuity income from a reverse mortgage are partly offset by changes in the amount that can be borrowed.