There is a considerable amount of discussion in the popular media and in policy
and academic writing that Americans are doing a poor job of preparing for retirement. This perception is reinforced by recent low (and sometimes negative) personal saving rates in the National Income and Product Accounts, and perhaps recent disruptions in the housing, credit, and stock markets, and slow economic growth. But efforts to assess the adequacy of wealth accumulation require an objective standard to reach conclusions. The workhorse standard has been the replacement rate. But replacement rates are a conceptually flawed measure. We argue instead that the lifecycle model provides a natural, normative tool for assessing the adequacy of wealth accumulation.