Evan Cooper writes that investing is less relevant to a comfortable retirement than most people think.
Appropriate levels of saving and spending are the real drivers of adequate retirement resources.
Not necessarily something that the asset management and accumulation industry wants to acknowledge, but the views expressed make perfect sense.
This poses a challenge for advisers, because investing has sex appeal and most schnooks are under the impression that finding the right investment or the right adviser will produce consistent above-average returns. That's one of the reasons Bernie Madoff was so successful for so long.
Advisers can't perform magic, of course, but what good is telling that to the average client? Most are psychologically and intellectually incapable of accepting the fact that their future standard of living depends more on their saving and spending habits than it does on investment results.
Maintaining an adequate standard of living in retirement has much more to do with the life-cycle investing approach to consumption smoothing than a pot of wealth at the end of the investing rainbow.
Source: Investment News
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