Report Advocates for Consistent 401(k) / 403(b) Contributions In The Range of 10% to 16% of Pay Over a 30-Year or 40-Year Career
- Created: Friday, 11 May 2012 10:17
East Granby, CT – May 11, 2012. The Retirement Advisor Council published a Position Paper on the concept of Retirement Readiness and what it means for the 401(k) and 403(b) plans industry. The Position Paper concludes that for many, target income replacement ratios should be higher than the 70-75% conventionally accepted as a rule of thumb. The higher ratio is to account for the projected cost of healthcare in retirement, and traditional financial planning concerns such as personal health, children education needs, and the cost of caring for elderly relatives. Regardless of target income ratio, the six panelists call for consistent contribution levels in the range of 10% to 16% of pay over a 30-year or 40-year career.