The 70 percent income replacement rate, which for decades has been the rule of thumb in assessing the country’s state of retirement readiness, is too arbitrary and ultimately “of little use” in measuring economic preparation for retirees, according to two researchers from the RAND Corp.
For some savers, a 70 percent replace rate proves woefully inadequate.
For others, it is too aggressive, writes Michael Hurd and Susann Rohwedder, in Measuring Income Preparation for Retirement: Income vs. Consumption, published through the University of Michigan’s Retirement Research Center.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
