Phil's
Personal Finance Tip of the Day:
Savings Fall Short for Most Retirees
By TOM LAURICELLA/The Wall Street Journal
Your financial adviser doesn't want you to read this column.
Many retirement investors, egged on by brokers and mutual-fund companies, put a great deal of emphasis on crafting finely tuned portfolios out of stocks, bonds and—increasingly, these days—other exotic investments.
Through website tools and advertising, investors are barraged with the message that allocating among different investments just so is crucial to achieving the retirement lifestyle they desire.
But all that focus on asset allocation in misplaced, a new study argues. For the vast majority of savers, improved investment returns won't materially extend how long retirement money lasts. That's, in large part, because few investors have enough money in their retirement account to tilt the balance.
Far more important, says the paper from the Center for Retirement Research at Boston College, are three variables that don't require a brokerage account: how long you work, controlling spending and tapping the value of your home.
Alicia Munnell, who heads up the retirement center, decided to write the paper after being asked to speak at a conference where the topic was that more people could use financial advice.
"My concern was that it was focused on the wrong thing," she says. The financial industry revolves around selling investments, Ms. Munnell notes, so the advice revolves around selling those products.
"The discussion is always: How much in stocks, and how much in bonds? What our paper showed is it really doesn't matter how that money is invested."
To read the entire article from The Wall Street Journal:
http://online.wsj.com/article/SB10001424052702303448404577408690819674200.html?mod=WSJ_PersonalFinance_PF16
A leader who develops people, ADDS – a leader who develops leaders, MULTIPLIES! — John Maxwell
at Dave Ramsey.com.
No comments:
Post a Comment