Calculating Savings Rates in Working Years Needed to Maintain Living Standards in Retirement
Benefits Quarterly, Vol. 25, No. 3, pp. 31-42, 2009
16 Pages
Posted: 18 Dec 2008
Last revised: 29 Sep 2009
Northern Trust Asset Management
Towers Watson; George Mason University - Mercatus Center
Date Written: November 19, 2008
Abstract
We establish an empirically based lifecycle model to gauge savings and replacement rates for maintaining a steady living standard over life. We consider a variety of scenarios and demonstrate that savings rates vary substantially with individuals' economic and demographic situations as well as retirement plan provisions. This result highlights that meaningful retirement planning must be specific to individuals or households and be based on a comprehensive knowledge of living means and needs.
Keywords: Defined Contribution (DC), Defined Benefit (DB), Savings and Replacement Rates, Living Standard
JEL Classification: J26, D91, D12, D14
Suggested Citation:
Suggested Citation
Pang, Gaobo and Warshawsky, Mark J., Calculating Savings Rates in Working Years Needed to Maintain Living Standards in Retirement (November 19, 2008). Benefits Quarterly, Vol. 25, No. 3, pp. 31-42, 2009. Available at SSRN: https://ssrn.com/abstract=1316842
