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Investing Specialists

Forget Income Replacement, Focus on Supplying Cash-Flow Needs

Income-replacement rates are a convention whose time has come--and gone.

When it comes to helping retirees figure out the financial aspect of their retirement plans, one of the conventions is "income-replacement rate." How much of the income you had while you were working will you need in retirement?

The discussion of income-replacement rates has its roots in the pension world, where an employee's pension income is typically expressed as being "X" percent of his or her final salary.

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