Zamara Actuaries, Administrators and Consultants Ltd

INCOME REPLACEMENT RATIO

INCOME REPLACEMENT RATIO
NARRATIONS

ARE YOU ON YOUR WAY TO A COMFORTABLE RETIREMENT?

In order to retire comfortably, a typical rule of thumb is that you will need to replace 75% of your pre-retirement income. The purpose of this tool is enable you to assess whether you are on track to achieve this target.

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Current Monthly Salary:*

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Your Income Replacement Ratio is : 0%

Insufficient: 60% Adequate: 60-80 Sufficient: 80-100

Projected balance at 0 years

Annual pension at 0 years

Annual salary at 0 years

0.00

INFORMATION ON REPLACEMENT RATIOS

1. A Replacement Ratio is a person’s gross income after retirement, divided by his or her gross income before retirement.

2. A Replacement Ratio helps a person understand whether they are saving enough for retirement.

3. In a recent study carried out by Zamara for 65,000 people, the average replacement ratio was found to be 34.0%.

4. A desirable target replacement ratio to enable you to retire comfortably is 75%.

The Income Replacement Ratio tool is a guide to help you to estimate whether you are on track for a comfortable retirement. It is based on your specific circumstances and assumptions that may change over time. All assumptions have an impact on the projections. We recommend you review your position at least annually as your own personal circumstances and market conditions change.

Personal circumstances will include:

Your actual age
Your retirement fund balance
Your salary
Your desired retirement date

For the purposes of the illustration in the tool, the pension at your desired retirement age allows for the following:

A guaranteed pension for life
With increases broadly equal to 75% of inflation (as measured by CPI)
With a pension to your spouse equals to 50% of your pension when you pass away
A five year guarantee period such that if you were to pass away within five years of retirement, the pension continues to your spouse for the balance of the five year period

Assumptions

The following key assumptions have been made for the purposes of the projections in the tool:

An inflation assumption of 7.0%
A 3 year age difference between you and your spouse (where male is older)
Mortality table used is a(55) ultimate

All calculations are gross of fees and taxes

Note: This calculator is provided as a guide and illustration. The values shown are based on assumptions and your inputs. The values are shown in future terms and do not consider the effect of inflation. Actual future values will be based on actual future experience and will differ from these projections. The values are gross of tax and fees. Tax at the rates applicable will be deducted at the point of accessing your benefit. Zamara will not be held responsible for your reliance on this calculator for your financial planning. We recommend that you speak to a financial adviser and review your retirement plan regularly to ensure you meet your goals.

INCOME REPLACEMENT RATIO

ARE YOU ON YOUR WAY TO A COMFORTABLE RETIREMENT?

Your Income Replacement Ratio is : 0%

INFORMATION ON REPLACEMENT RATIOS

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