In the latest issue of the Morningstar Magazine you can read about why common assumptions of how much income a retiree will need don’t always work.
Retirement is the most expensive lifetime “purchase” made by most people. Therefore, it makes sense to understand how much retirement is actually going to cost, but it’s a complex calculation. We will briefly explore some common assumptions used when estimating the cost of retirement – such as generic replacement rates of 70% or 80%, the idea that retirement spending increases annually by inflation, and that retirement lasts 30 years – and find that these assumptions often do not pan out.
Read the full article – True cost of retirement__