An international perspective on “safe” savings rates for retirement

Pfau, Wade Donald and Kariastanto, Bayu (2012): An international perspective on “safe” savings rates for retirement.

Abstract

This article simulates the savings rates required to meet retirement income goals in the worst-case scenario from overlapping historical periods for savers in 19 developed market countries. In the baseline, workers save for 30 years to replace 50 percent of their pre-retirement net income with subsequent inflation adjustments over a 30-year retirement. Public pension benefits would be added to this. The worst-case scenario saving rates ranged across the countries from 16.3 percent to 74.3 percent. Americans enjoyed the best worst-case savings scenario, and a broader international perspective suggests more caution may be needed when formulating retirement planning guidance.

• Item Type: MPRA Paper
• Language: English
• Keywords: safe saving rate, retirement planning, historical simulation, developed countries
• Subjects: G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C15 - Statistical Simulation Methods: General; D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Household Saving; Personal Finance

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