Credit: Shutterstock photoBy SA Gil Weinreich :
Following yesterday's theme about a retirement reality gone off the rails, today we feature a piece by BlackRock that views the situation positively. Not that BlackRock disputes a problem exists; rather, the firm proposes people can turn the situation around by taking simple actions, as indicated by the article's upbeat title, " How to Worry Less and Save More ."
Logically, BlackRock acknowledges the problem before it offers a solution, citing a survey it has done showing investors' biggest worries are longevity, healthcare and retirement. The firm's solutions are to commit to a plan, seek help and "acknowledge your feelings."
Could it all be so simple? Let's further explore these ideas.
According to the Society of Actuaries ((SOA)), longevity is increasing. Indeed, the IRS proposes to adopt SOA's new mortality tables, which will have a major impact on the "fundedness" of corporate pension plans.
Key findings in the latest National Retirement Risk Index put out by Boston College add credence to worries about healthcare and retirement, as follows:
As for solutions, research presented by Harvard Business Review suggests committing to a plan is a key marker of success. This article from Investopedia suggest an advisor could be helpful in your process, while this one from Scientific American endorses the benefits of acknowledging your feelings.
Okay, I admit it: I was in a googling mood today, and I neither vouch for nor reject out of hand some of these findings.
But as a general principle, I think that most studies are going to back up common sense. That doesn't mean that a study that contradicts common sense is wrong, only that those which do oppose common sense are the ones that need to be thoroughly checked out.
When it comes to the retirement crisis, we don't need studies to indicate what is plain to see: increased longevity and costly health concerns imply a choice between saving more or working longer. As to solutions, committing to a plan seems inarguable. I don't think common sense argues either for or against using an advisor or acknowledging your feelings. Those are more personal issues and it is probably worth checking to see if you find that doing the opposite is harmful to your efforts to save.
A closing anecdote: I recently encountered the story of a woman who amassed $1 million before turning 40, despite starting out with limited means. Her secret was no secret at all - she just lived below her means, plying a portion of each paycheck together with the entirety of every financial gift and pay raise into the stock market. These traits are common to many a millionaire next door. It's simple in principle, though it takes setting and adhering to a disciplined plan.
Please share your thoughts in our comments section. And for now, here are today's financial advisor-related links:
- Yuval Taylor make a provocative argument against price trends in stocks.
- Charlie Bilello: Is this market as good as it gets ?
- Dave Dierking performs simulations to ascertain whether a 4% withdrawal rate can last through retirement.
- John M. Mason: Fed policy and stock market performance .
- For more content geared to FAs, visit the Financial Advisor Center , sponsored by Franklin LibertyShares ETFs.
See also Why Is Goldman Sachs Investing In Venezuelan Sovereign Bonds? on seekingalpha.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
