A new report from Metropolitan Life Insurance Co. suggests that financial advisers need to educate their clients better on the importance of managing their emotions as well as their spending and investing behavior during and close to retirement just as they did-presumably-when they were saving up for their golden years.

The report, titled "Engaging Clients in a New Way: Putting the Findings of Behavioral Strategies to Work," encourages financial advisers to gradually shift the conversation and clients' investment strategies from accumulation of assets to the distribution of those assets as income as they near retirement.

The advice comes at a time when more and more Americans admit they're panicked about whether or not they'll have enough savings and-more important-income when the time comes to retire.

The report says that while almost every investor saving for his or her retirement grasps and fundamentally believes in the strategy of "buying low and selling high," the recent economic tumult-and subsequent deterioration of their portfolios-compelled way too many pre-retirees to panic and sell large chunks of their retirement investments based on the irrational fear that the bottom would never come.

Walking that fine line between being compassionate to investors' current and understandable fear and rage while simultaneously reassuring them that the cyclical nature of the market over decades and decades of performance dictates that they should stay the course or, better, invest more becomes advisers' most daunting challenge, MetLife said.


Larry Barrett writes for Financial Planning.

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