Factors influencing the optimal replacement rates for retirement.

Factors influencing the optimal replacement rates for retirement.

The survey finds that 75% are median optimal coverage for married couples - apparently confirmed by gold standard rules often used in budget planning retirement.

However, the study says, as is often the case, the average errors represent the wide variation in optimum replacement rates for households in different situations.

Replacement rates for a married couple has to be larger than a single person otherwise identical, both because of the few higher health care costs in retirement, and because of the increased life expectancy of at least a partner.

While the study found that the median optimal rate for married couples to 75%, the average individual 401k optimum rate was 55%.

Replacement rates for low-income individual 401k and families would be higher than the rates for high-income individuals and families, due to a reduction on savings and taxes in retirement will be lower for low income individual 401k and families.

High income need less coverage than low-income households due to the significant reduction in the average effective tax rates. Of course, the opposite applies the point: if you expect future taxes to increase replacement rates optimal destination for high-income households should reflect these expectations.

A household with many children have a lower penetration of a home without children, because a couple with children when pensioners will be much lower costs of raising children than they did at work. Other factors affecting retirement optimum coverage.