About this interactive chart: The percentage of pre-retirement income needed shows an estimate of the percentage of after-tax income from the final year before retirement needed to cover spending needs and is for illustration only. Actual individual circumstances will vary.
The income replacement percentages shown are a combination of Fidelity’s guidance regarding replacement rate in retirement, income based spending patterns from Consumer Expenditure Survey 2012 from Bureau of Labor Statistics. The interactive graphic assumes a starting point of 85%.

Income
The target replacement ratio (“Percentage of pre-retirement income needed”) presented in the interactive graphic reflects income-based spending patterns from Consumer Expenditure Survey 2012 from the Bureau of Labor Statistics. The data in those statistics was divided into four bands based on income level and that was used to inform the estimate of replacement ratio. In general, lower income households will require higher income replacement percentages. The level and composition of expenses in retirement is observed to change less than for higher income cohorts.   Please note that the income amount used here is the pre-retirement after-tax income, not your current income. For example if you are 25 year old earning $40,000 annually after taxes, and planning to retire at age 67, your pre-retirement income would be close to $74,000 based on a real wage growth rate of 1.5% per annum.   The four income bands are less than $50,000, $50,000-$80,000, $80,000-$120,000, or more than $120,000.  The after-tax numbers are estimated for a 3 member household, filing under married filing jointly status, using 2013 federal tax brackets. No FICA, state or local taxes are considered.

Lifestyle: Travel and recreation
To account for variation in lifestyle based spending the income replacement rate is again adjusted. These adjustments are for illustration only and actual spending will vary. The magnitude of these adjustments is based on data from the International Council on Active Aging, Bureau of Labor Statistics Consumer Expenditure Survey, and Fidelity research. For the purpose of this illustration, the activity levels are defined as:
Very high  (far above average duration & intensity): extensive travel, local recreational pursuits, lifelong learning and volunteer opportunities for7 to 12 years of active aging where vacation/recreation/adventure costs are 4 times what recreation/vacation costs were during working years. Estimated expense changes based on Consumer Expenditure Survey data for the income bands defined above.
High (above average duration & intensity): some travel, local recreational pursuits, lifelong learning and volunteer opportunities for part of your retirement, then becoming less active--5 to 7 years of active aging where vacation/recreation/adventure costs are 4 times what recreation/vacation costs were for the adults of a household during working years.
Medium (average duration & intensity): Maintain lifestyle, including travels and activity expenses, at a level consistent with pre-retirement standard.
Low (far below average duration & intensity): very little or no participation in outside pursuits due either to preference or health conditions.

Health
The income replacement rates are adjusted for expected health expenditures using Medical Expenditure Panel Survey Data, U.S. Department of Health and Human Services and Fidelity research. Actual results will vary, but for illustration four health levels are used.
Excellent: Health care costs are essentially insurance premium fees with minor co-pay activity, 0 to 1 prescription meds, and 1 chronic condition per individual after age 75.
Good to very good: Out-of-pocket health care costs are estimated insurance premium fees, with minor co -pay activity, 2 to 3 prescription meds, and 1 to 3 chronic conditions with initial being experienced at retirement age and additional conditions commencing in 7 year increments.
Fair to average: Out-of-pocket health care costs are insurance premium fees, with average co -pay activity, 3 to 4 prescription meds, and 3 to 4 chronic conditions with initial being experienced at retirement age and additional conditions commencing in 5- year increments.
Poor to below average: Out-of-pocket health care costs are insurance premium fees, with 40% above average co -pay activity, 5  to 7 prescription meds,  5 to 6 chronic conditions with initial being experienced at retirement age and additional conditions commencing in 4  year increments.