Asset Allocation

Retirees and those saving for retirement should think of themselves as the managers of their own personal pension plan.  

Many people used to have access to a traditional, defined benefit pension plan through their employers.  With a defined benefit pension plan, someone else (an employer or professional managers hired by an employer) assumes responsibility for managing plan contributions, investments and...

Retirees have every reason to be an extremely risk averse bunch.  After all, most of them have an immediate or near-term need to draw income from their assets.  This need for income should result in zero tolerance for investment risk or reduction in value of the assets that are intended to produce the retirement income...

What options are available to a soon-to-be retired household that is financially constrained?  What levers can be pulled if desired retirement spending is not realistic in light of retirement savings?

The odds of financial success in retirement for the typical American household are less than ten percent.

This is based on the financial profile of an American household that would be considered statistically average.  We developed the financial profile of an average American retiree in a previous article (click here to read).  

The summary of the financial profile of our hypothetical retiree--referred to as William--is as follows:

• William needs to generate $40,038 per year in after tax
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There is a strong case to be made for health care as the linchpin of retirement planning.  Virtually every...