How Accurately does 70% Final Earnings Replacement Measure Retirement Income (In)Adequacy?

Tuesday, April 1, 2014: 10:30 a.m.
Virginia Suite AB (Washington Marriott Wardman Park)
The most commonly advocated benchmark in retirement planning is that 70% of gross final annual employment earnings will sustain an individual’s standard of living after retirement. This benchmark has been used by financial planners, pensions plan advisors, academics, public policy makers and much of the research that has predicted that Canadian and American workers will be financially unprepared for an adequate retirement. 

This presentation examines whether Canadians who hit this target actually can expect to maintain their living standards in retirement.  I also discusses the optimal construction of a replacement rate measure that might better predict living standards after retirement.

*Awarded PBSS Track Prize

Presentation 1
Bonnie-Jeanne MacDonald, PhD, FSA, Dalhousie University
  • ICA RR MacDonald Jan 8 2013.pdf (2.7 MB)