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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