(Bloomberg View) -- Half of working-age households in theU.S. were on track in 2016 to be able to maintain theirstandard of living in retirement, according to the NationalRetirement Risk Index report out this month from the Centerfor Retirement Research at Boston College.

Thanks mainly to rising home values, that'sbetter than in 2010 or 2013. But it still means that half ofworking-age households aren't prepared for retirement, up from just30.4 percent in 1989.

The Center for Retirement Research calculates thesepercentages based on data from the Federal Reserve's triennialSurvey of Consumer Finances, the 2016 edition of which wasreleased in September.

They come up with target income replacement rates based oncertain household characteristics (own or rent, single or not, twoearners or one, etc.), then estimate how many of the households inthe survey are saving enough and can expect a big enoughSocial Security and/or pension payment to meet that target if theworkers in those households retire at 65.

There's been some debate over whether these target incomereplacement rates are too high: In 2014, American EnterpriseInstitute resident scholar Andrew Biggs and veteran pension consultantSylvester Schieber argued that they were, Center for RetirementResearch director Alicia Munnell explained why she was pretty surethey weren't, and Biggs and Schieber replied with furtherarguments for why they were.

There's more discussion of the issue in the new report, and ifyou want to get deep into some interesting actuarial wonkery, Irecommend reading the whole exchange.

After reading through all of it myself, though, I still don'tknow exactly what percentage of American workers is unpreparedfor retirement.

In 2015, the Government Accountability Office summed upthe current state of knowledge as "studies generally foundabout one-third to two-thirds of workers are at risk offalling short."

What's clear from the National Retirement Risk Index,though, is that when consistent standards are applied toSurvey of Consumer Finances data going back to 1983, thepercentage of Americans who don't meet the retirement-preparednessminimum has risen a lot.

Why is that? I asked Munnell, and got back this accounting ofthe contributing factors going back to 2004:

In calculating the index, the Center for Retirement Researchassumes that when they hit 65, homeowners will take out reversemortgages (where the bank pays you) and those with money in401(k)s, individual retirement accounts, and other savings andinvestment accounts will buy inflation-indexed annuities withit.

Most Americans don't do either of these things, ofcourse, but many should, and these methods create incomeestimates that can be combined with Social Security and/orpension income to give a fair picture of a household's potentialretirement income.

The annuity rates are calculated using an estimate of realinterest rates derived from 10-year Treasury yields and FederalReserve inflation expectations, and mortality tables providedby the Social Security administration.

Lower real interest rates (which imply lower real investmentreturns) and longer lifespans mean that annuity providers would bewilling to offer less in annual income for a given lump sum.

And even if you don't buy an annuity, both those factors will ofcourse play a big role in determining whether your retirementsavings will be adequate to see you through.

Much attention has been focused (in this column and elsewhere)on the impact of the shift from defined-benefit pensions todefined-contribution 401(k)s in making retirement in the U.S. morecomplex and possibly less secure.

As is apparent from the above chart, the decline indefined-benefit pensions is in fact the single biggest contributorto the rise in retirement risk since 2004, and it surelyfigures at or near the top of the list of contributors to thelarger rise since the late 1980s.

But after reading "Falling Short: The Coming RetirementCrisis," the excellent layman's guide to the issue publishedby Munnell, her Center for Retirement Research colleagueAndrew Eschtruth and legendary investing consultant CharleyEllis in 2014, it's hard not to fixate on something else asthe real chief cause for the rise in retirement risk:

Yes, we're living longer. And even as overall life expectancy has taken an unexpected hit inthe U.S. in recent years because of the opioid epidemic andother issues, life expectancy at 65 has kept rising.

As of 2016 it was age 83 for men and 85.6 for women,according to a report issued last month by the Centers for DiseaseControl and Prevention.

As already described, this rise in life expectancy figuresdirectly into the National Retirement Risk Index via theannuity rate calculations.

But it's also a major reason corporations have stepped away fromproviding defined-benefit pensions and retiree health care, and isthe major reason Congress voted in 1983 to slowly shift thefull retirement age used in calculating Social Security benefitsfrom 65 to 67.

Along with lower birth rates, it may also be contributing todeclines in real interest rates as the aging of the populationdepresses prospects for economic growth.

Apart from all that, of course, it's also great news. We'reliving longer! And as Ellis, Munnell and Eschtruth write in their book, there is a straightforward way toaddress the challenges this poses:

By and large, those who continue to work beyond theirmid-sixties should have a reasonably comfortable retirement.

For me personally, this is reassuring. I do work that I enjoythat isn't physically demanding and that I can easily envisioncontinuing in some altered form well past 65.

I've read "The 100-Year Life," Lynda Gratton and Andrew Scott'sbook about structuring four- and five-stage careertrajectories that allow you to keep working happilyinto your late 80s, and I'm mostly down with that idea.

While working that long is probably too ambitious for mostpeople just yet, the percentage of Americans staying in thelabor force past age 65 has been rising since the early 1990s andis higher in the U.S. than in most other wealthy countries.

It's a key reason the current group of 65-plussers in theU.S. appears to be at least as well off as previousgenerations and comes off better than OK in internationalcomparisons as well.

But not everyone can work past 65! Those who do physicalwork may have to stop well before that, and various ailmentswill trip up lots of others. What's more, if your job doesn't paywell, you're much less likely to live long past 65anyway.

The life-expectancy gap between high earners and lowearners is large and growing in the U.S., which raises all sorts ofnew questions about what a fair retirement system should looklike.

Among other things, this gap is increasingly cancelingout the progressivity of Social Security: Low earners geta higher percentage of their income replaced than high earners butcollect benefits for fewer years because they don't liveas long.

So any solution to the "coming retirement crisis" is going tohave to be different for people in different income groups.For a lot of us, it will just mean working longer. But for a lotus, it can't.

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