http://www.nytimes.com/2007/01/27/business/27money.html?_r=1&hp&ex=1169960400&en=d8d920a17d2e1b81&ei=5094&partner=homepage&oref=sloginThe starting point for most retirement plans is the so-called replacement rate. It says an American needs an annual income in retirement equal to 75 percent to 86 percent of what he or she earned in the final year of employment. Someone making $100,000 would typically plan for about $85,000 a year in retirement.Coupling that with a second industry rule of thumb that says retirees should spend no more than about 4 percent of their assets each year to make them last, a typical couple with that level of income should enter retirement with at least $2.1 million in assets, including 401(k)s, I.R.A.'s, stocks and bonds, real estate, cash value life insurance, pensions and Social Security benefits. Not so, says Mr. Kotlikoff. It may be simple, but he argues it is more important to look at how people spend their income while working to determine how much they will need when retired. Mr. Kotlikoff's calculations showed that Fidelity's online calculators typically set the target of assets needed to cover spending in retirement 36.4 percent too high. Vanguard's was 53.1 percent too high. A calculator offered by TIAA-CREF, one of the largest managers of retirement savings, was 78 higher than his calculation. </snip>Here's a review I did of Prof. Kotlikoff's program ESPlanner last year.http://www.retireearlyhomepage.com/esplanner.htmlintercst
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