1 Outdated Retirement Rule You'll Want to Forget ASAP, and 1 to Use Instead
Almost everyone who plans to retire has heard the advice that you should aim to replace 80% of your work-based income once you quit forever. For decades, this rule of thumb was on target. The theory is that simply having a job consumes 20% of your wages. Once you're no longer employed, you'll automatically dial back around one-fifth of your usual spending.
However, even the best-intended and once-helpful advice is subject to eventual failure.
This may well be the case with the 80% rule now. Thanks to uneven cost-of-living increases that disproportionally impact older Americans, replacing only four-fifths of your salary may leave you cash-strapped in retirement. You'll be better off aiming to replace a higher portion of your job's pay.
Source Fool.com
