No Retirement Crisis, But Advisors' Help Urgently Needed

WASHINGTON - Is the United States facing a retirement crisis? The response from retirement experts and academics at a recent conference was a resounding ‘maybe.’

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Comments (1)
This article makes no mention of health care risk, i.e. long term care costs which left unaddressed, can decimate even the most thoughtful retirement plan. Both the timing and duration of long term care costs are unknown to any retiree and must be addressed if retirement plan success probability is to be optimized. When you pay a premium for a robust LTC insurance policy, your "cost of care" becomes merely paying the premium. Secondly, adverse sequence rate of return at the onset of retirement is ignored in this article and must also be addressed and mitigated. Once again, adverse rate of return sequence early in retirement can decimate your retirement success. Finally, the only way to truly insure against longevity risk is to acquire a guaranteed lifetime income stream via an immediate annuity type product. Systematic withdrawals simply do not provide a guaranteed income stream which cannot be outlived. The longer retirees live, the greater their longevity risk exposure. The confluence of a strong equity portfolio with periodic withdrawals to address inflation risk in combination with lifetime annuity income "flooring" and a robust LTC policy are all essential elements to a high success probability retirement Plan.
Posted by THOMAS S | Wednesday, April 09 2014 at 12:16PM ET
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