The picture for near and current retirees has changed 180 degrees in the past couple of years.
Questions such as where to retire and what do do during retirement are replaced with whether to retire and how to make sure one does not run out of money during retirement.
Working longer, waiting to draw on Social Security, and understanding longevity risk are front and center for the vast majority of retirees.
Decumulation or drawing sustainable income from accumulated financial assets is one of the major challenges and opportunities in personal finance:
Over the next 10 years the first wave of retirees heavily dependent on their 401(k) savings will start to draw down their assets. And that’s cause for new concern among retirement experts. Just as participants have struggled to make the right investing moves during the accumulation phase, so too are we expected to founder at managing withdrawals in retirement; what’s known as the decumulation phase. “The notion that the average person can manage their own retirement portfolio is akin to suggesting that anyone can just step in and fly an airplane or operate on their appendix,” says William Bernstein, author of The Four Pillars of Investing and co-founder of Efficient Frontiers Advisors.
Source: CBS News
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