WAGE REPLACEMENT RATIO
01.Core Concepts
• Individuals typically need 70%-80% of their preretirement income during retirement. • Qualified plans can provide this amount for low- and middle-income workers. • Executives who earn substantially m ore than the covered compensation limit cannot achieve this level of savings within qualified plans due to the covered compensation limit of $350,000 for 2025. • Deferred compensation plans can provide nonqualified benefits to an executive to increase the executive’s wage replacement ratio.