The source of the "save 15% for retirement" claim

[Nutria]

http://www.investopedia.com/articles/personal-finance/092414/retirement-what-percentage-salary-save.asp

They found that individuals earning the average wage would have to save 15% of their earnings every year to meet a 70% replacement rate at age 65. The biggest factor in the calculations was age – when you started saving and when you ended. Start saving at 25 and you only need to earmark 10% of your annual salary to retire at 65; if you wait until 70 to quit working, you'd have to save only 4% annually.

[Smallsteps]

good post
I truly believe for some people these generic percentages without the further explanation of how they came up with it, discourages some
I have known those who think well if I can't save ( insert a specific amount or specific % ) then I won't try at all.
I think instead of these ideals it would be better to encourage any regular savings no matter how small.

[Nutria]

I truly believe for some people these generic percentages without the further explanation of how they came up with it, discourages some I have known those who think well if I can't save ( insert a specific amount or specific % ) then I won't try at all.
I think instead of these ideals it would be better to encourage any regular savings no matter how small.

Interesting point. I think that's a pretty common trait in humans (though which area picked for "I won't even try" differs from person to person).

[greenskeeper]

less debt = less savings required for retirement.

However, when you think you've saved enough, save some more.

[~bs]

I think it's a good generic rule of thumb, especially for those people that can't be bothered (too lazy) with attempting to spend time with their investment account to make strategic decisions. At least hopefully it can serve as kind of a wake up call for them.

[disneysteve]

less debt = less savings required for retirement.

Not just less debt but lower expenses overall. The more costly your lifestyle, the more you need in retirement to maintain it. Big house, nice cars, fancy vacations, fine dining... it all adds up. If that's what you're used to and want to keep having in retirement, you need to save enough to make that happen.

[kork13]

One more facet to the savings (and my personal favorite)... The larger the proportion of your income that you save, the less you'll need in retirement because your expenses will have been lower in order to support the elevated savings rate.

[dczech09]

I think instead of these ideals it would be better to encourage any regular savings no matter how small.

That is a great intention. However, that may lull some people into a false sense of security. If someone in their mid 30's tells me

"I have been saving 5% of my income every year for 5 years."

I am not going to give them a pat on the back and say they are doing great. I am instead going to say something to the effect of

"Great job up to this point. However, I am going to recommend (insert course of action here) in hopes of increasing your contribution to 15% per year. We will not get you to 15% right away, as that would be a shock to your budget. We will get you to 15% over the course of a year and a half or two."

When educating on personal financial matters, we do not want to discourage people, but we also do not want to give them false hope. Both are equally dangerous.

Gotta be real!

[LivingAlmostLarge]

My mom doesn't get it at all. She always says that people need to work forever, though she retired at 55 with a pension. Because people can't save. When I point out that people are retiring early by saving she said they just think they can retire but will go back to work in 10 years. I don't think it's even fathomable that my DH and I could possibly retire now if we really wanted to. But we aren't and at the rate we're going we won't till the kids are out of the house.

[snafu]

My research suggests the 15% retirement saving is reasonable for those who do not actively participate in managing their money. I'm being convinced that it's critical to have your home paid off [mortgage free], eliminate student, car or significant personal loans, pay off monthly credit card debt, take care of your health with appropriate diet and exercise, and feel confident your children, when adult age, have been 'launched,' unlikely to need parental financial support.

I'd add knowing/managing/attention to allocation of retirement contributions. Doesn't this sound like what SA advocates strive towards?
Understand you likely modify the 'risk factor' of retirement savings but you don't withdraw the entire sum on retirement day! You likely drawn down annually or monthly as preferred to support 1 st of three 'stages' of retirement.

# 1. Active, likely spendy, time to do projects, follow interests, travel, learn, socialize and explore

Stage 2. seems more family and home based. A significant percentage of retirees choose to downsize, selling the family home to reduce effort. [It goes a long way to help DKs from having to clear out estates] This frees up the sum invested in the home and likely supports the cost of the next preferred accommodation.

The 3rd stage appears to revolve around managing health and enjoying community events. Hopefully you've checked out all the senior benefits like medicare, and a plethora of municipal, state and federal services your tax dollars have supported from your 1st dollar earned.

While the promotion suggests you need 70% of replacement rate, those numbers shift if your mortgage is gone, you have no significant monthly expense for SL, CC, personal or car load, DKs are no longer drawing and tax rate is lower reflecting income. Rather than contribute, you can collect SS. I suspect the argument could be made for a 45% replacement rate.