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An international perspective on “safe” savings rates for retirement

Author

Listed:
  • Pfau, Wade Donald
  • Kariastanto, Bayu

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.

Suggested Citation

  • Pfau, Wade Donald & Kariastanto, Bayu, 2012. "An international perspective on “safe” savings rates for retirement," MPRA Paper 39066, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:39066
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    File URL: https://mpra.ub.uni-muenchen.de/39066/1/MPRA_paper_39066.pdf
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    References listed on IDEAS

    as
    1. Pfau, Wade Donald, 2011. "Safe Savings Rates: A New Approach to Retirement Planning over the Lifecycle," MPRA Paper 28796, University Library of Munich, Germany.
    2. Alicia H. Munnell & Anthony Webb & Francesca Golub-Sass, 2011. "How Much to Save for a Secure Retirement," Issues in Brief ib2011-13, Center for Retirement Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. An international perspective on “safe” savings rates for retirement
      by Wade Pfau in Pensions, Retirement Planning, and Economics Blog on 2012-06-01 09:52:00

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    More about this item

    Keywords

    safe saving rate; retirement planning; historical simulation; developed countries;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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