Most of today’s pre-retirees and retirees will fall short of the retirement income replacement goal that’s commonly advocated by retirement planners. According to planners, you need a gross retirement income from all sources that ranges from 70% to 85% of your preretirement pay; attaining that goal will replace all your after-tax, spendable income while you were working.
The trouble is, most of today’s pre-retirees haven’t saved enough money to meet that goal if they retire at age 65, when they combine the retirement income from their savings with their expected Social Security benefits. Consequently, they face a potentially tough choice: work beyond age 65, reduce their spending compared to their working years, or some combination of the two.
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