In Retirement Planning, Old ‘Rules’ Can Lead To Failure

Beware of old retirement rules of thumb – they may lead to poor planning practices.

While most advisors assume that they will adjust retirement plans for market conditions that exert varying amounts of stress on retirement portfolio growth, fewer consider the need to adjust their assumptions about income generation in retirement.

As a result, retirement strategies fall short because they underestimate the cost of generating retirement income, says Phil Murphy of S&P Dow Jones Indices. As investors and advisors attempt to juice their portfolio income, their plans become more prone to interest rate, duration and, most of all, sequence of returns risk.

“The retirement industry has to do a better job of getting people’s awareness and mindset refocused,” says Murphy.

from FA News http://www.fa-mag.com/news/different-times-require-different-rules-of-thumb-for-retirement-planning-32791.html

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s