“The typical advice is that you should aim to replace 70% to 90% of your annual pre-retirement income through savings and Social Security. For example, a retiree who earns an average of $63,000 per year before retirement should expect to need $44,000 to $57,000 per year in retirement. Use our retirement calculator to figure out how much you need to save for your retirement.” Source: Nerd Wallet
Good advice, right?
There is just one problem. Don’t base your replacement percentage on your average income. Average income is what a pension plan and Social Security use.
Your living standard when you retire is based on your income at the time, not an average. You need to replace that income… unless you want a significant drop in your living standard.