Which term describes the executive retirement income replacement typically aimed for by plans?

The term that accurately describes the typical executive retirement income replacement aimed for by plans is often in the range of 55% to 60%. This percentage reflects the standard objective for executives to maintain a respectable standard of living in retirement, considering their pre-retirement income levels.

In planning for executive retirement, organizations typically aim for a balance that allows executives to replace a significant portion of their working income. The range of 55% to 60% signifies a conservative approach that recognizes the higher income levels executives often earn. It ensures that, upon retirement, they have sufficient income to support their lifestyle while acknowledging that other factors, such as pensions, savings, and investments, contribute significantly to their total retirement income.

Knowing how this range aligns with compensation structures helps companies design retirement plans that are attractive and competitive for their executives, thus retaining and incentivizing key leadership.