I got this via a local financial planner. Anyone familiar with Employee Benefits Research Institute and the validity of this study??
"Conventional wisdom, like everything else, is subject to change. One retirement rule of thumb that needs to be updated is the idea that you will be able to live comfortably on 70% to 80% of your pre-retirement income after you retire. More than one-half of retirees reported that they spent 95% to more than 105% of their pre-retirement income during 2005, according to a recent survey conducted by the Employee Benefits Research Institute (EBRI).
One reason for the increase is rapidly growing healthcare costs. A 2006 EBRI survey found that 55-year-olds who live to age 90 will need to have about $210,000 socked away (by age 65) in order to pay for out-of-pocket medical expenses and insurance to supplement Medicare during retirement.
So, what’s the new rule of thumb? The folks at EBRI suggest adding 20% or more to the amount of pre-retirement income that you plan to replace after retirement."
"Conventional wisdom, like everything else, is subject to change. One retirement rule of thumb that needs to be updated is the idea that you will be able to live comfortably on 70% to 80% of your pre-retirement income after you retire. More than one-half of retirees reported that they spent 95% to more than 105% of their pre-retirement income during 2005, according to a recent survey conducted by the Employee Benefits Research Institute (EBRI).
One reason for the increase is rapidly growing healthcare costs. A 2006 EBRI survey found that 55-year-olds who live to age 90 will need to have about $210,000 socked away (by age 65) in order to pay for out-of-pocket medical expenses and insurance to supplement Medicare during retirement.
So, what’s the new rule of thumb? The folks at EBRI suggest adding 20% or more to the amount of pre-retirement income that you plan to replace after retirement."