Balancing Pre-Retirement Savings with Post-Retirement Needs
For decades it has been assumed that an ideal retirement income should replace 70% of pre-retirement income. There was very little in the way of evidence backing up this “rule of thumb” but it has remained the goal for constructing pre-retirement savings programs.
In the last few years new analysis and research has developed an alternative to the 70% “rule of thumb” based on an individual’s living standards leading up to retirement. This has been given the name Living Standard Replacement Ratio (LSRR).