Retirement adequacy goals, or how much is required to retire comfortably, are important for
financial planning. The primary purpose of this paper was to produce updated retirement
adequacy goals for one- and two-adult households using IES 2010–2011 data, updated economic
assumptions and updated tax rules. It was found that consumption does not change at or in
retirement. The calculated retirement adequacy goals were dependent on a number of different
factors including household composition and retirement age. There was evidence that higher
dwelling values were associated with higher goals and, in certain cases, an inverse relationship
between income and goal levels was found. There was some evidence of households saving more
for retirement by reducing saving elsewhere or using debt which resulted in higher targets.
For retirement adequacy goals to be useful for planning purposes, they should be relatively
stable over a short period of time. A further aim of the paper was to assess the change in
the results between this and a previous study. Using consistent methodology, single females
required approximately one times annual salary less than previously while single males and
couples required 0,3 times annual salary and one times annual salary more respectively. These
changes were driven by economic factors, sensitivity to tax and demographic data changes. This
highlights that retirement adequacy goals will evolve at a household level due to tax changes and
as the demographics of the household change, emphasising the importance of regular financial
planning incorporating tax modelling. At an aggregate level, this volatility is even greater which
makes setting a single long-term goal in a retirement fund extremely difficult.