Final answer:
Today's workers in the United States are estimated to spend 20% to 25% of their lives in retirement, considering factors like increased standard of living and the advice from financial advisers to save about 70% of pre-retirement income for a comfortable post-retirement life.
Step-by-step explanation:
On average, today's workers in the United States will spend 20% to 25% of their lives in retirement. This accounts for individuals who start saving from a younger age, with the intent to retire around the age of 60 and live off their retirement savings until approximately age 85. Several factors, including the rise of incomes for senior citizens and the steady increase in the standard of living, affect this percentage.
For instance, consider Yelberton, who plans to save for retirement from ages 30 to 60 with an expected rate of return of 6% per year based on the formula for compound interest. He needs to determine how much of his earnings he should consume during his working life and how much to put aside for after retirement. While many variables influence how much money is needed for retirement, most financial advisers suggest that retirees will require approximately 70% of their pre-retirement income to continue to live a comfortable lifestyle.