The Essential Retirement Guide by Frederick Vettese

Author:Frederick Vettese
Language: eng
Format: epub
ISBN: 9781119111139
Publisher: Wiley
Published: 2015-12-21T00:00:00+00:00

Lessons Learned

Before we move on to consider the prospects for current savers, let us consider what the historical results can teach us. Starting with the obvious, the 8 percent saving rate proved to be excessive, given that the savings needed to generate income of only 17 percent of final average pay. To see how excessive, let us take the very worst result (the period 1946–1975) and the very best result (1971–2000) and bracket the range in savings that would have been required. The process involves subtracting off the portion of total income that comes from Social Security and then normalizing the result to bring the overall income down to the 50 percent target. The results of our calculations are shown in Table 13.2.

Table 13.2 Savings Rate Needed to Hit the 50% Target

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