She picked 5 percent, however, because she talked to some people about what is reasonable. Some financial planners would tell people to draw down 4 percent a year, so 5 percent is close to that. They probably would not tell people to liquidate their investment in their house. So she used total net assets to make it easy. But a more refined analysis might separate pension assets from other types of assets and might account for having a spouse and so forth, leading to a much more complex projection. Also, there are different ways one might expect people to spend down. There is also significant underreporting here in both income and assets.

James Ziliak asked both Hurd and Banthin if they included Social Security wealth in their definition of assets. He questioned Hurd’s statement that 61 percent of people ages 66-69 are adequately prepared for retirement. The number he recalls is more like 80 percent, based on analysis by Shultz and Sheshardi, who are using the full HRS. He asked whether this 20 percentage point difference of adequacy is a different calculation, or whether it is something that is happening with using a smaller subset of the HRS.

Hurd responded that neither he nor Banthin included Social Security as a wealth measure. Both included Social Security as an income measure, which is the proper way to do it, in his view. The 61 percent figure for adequacy is for single persons only. The figure for married persons is in the 80s. Adding the two together, one gets about 72 percent. Schultz and Sheshardi have come down somewhat in their number; they are a little bit higher, but not that much higher.

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