The replacement ratio: Making it personal

April 16, 2019

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A replacement ratio is a rule of thumb commonly used to estimate how much of a person's pre-retirement income is needed to maintain their lifestyle at retirement. In The replacement ratio: Making it personal, Vanguard researchers look at the role this ratio should play in retirement planning and set out how to arrive at a reasonable initial replacement ratio based on household characteristics. Because people—and thus their retirement goals—are unique, certain factors can further affect the replacement ratio of otherwise similar investors.

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