Savings Rate Should Be 14%

The National Retirement Risk Index (NRRI) estimates that about 50% of working families are at risk of being unable to maintain their current standard of living in retirement. Boston College's Center for Retirement Research (CRR) studied how much workers would need to save to maintain their pre-retirement standard of living.

CRR researchers concluded in How Much Should People Save? that, on average, workers need to look to retirement savings plans for about 35% of their retirement income. To reach that income target, the average required savings rate is 14%, assuming that saving begins at age 35 and retirement is at age 65.

Prudential, which sponsors the NRRI, noted in The Role of 401(k)s in Retirement Income that 401(k) plans can enhance retirement security with matching contributions, automatic enrollment, retirement income modeling tools, and guaranteed retirement income options.

The CRR report is at, and Prudential's paper is at

For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

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© 2015 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan's legal counsel or tax advisor for advice regarding plan-specific issues.