Workers today need to be saving much more for retirement than their predecessors. That they have not signals an impending retirement income crisis. The Center for Retirement Research projects that 52 percent of today's working households will not have adequate income in retirement -- around two thirds when one takes health and long-term care costs into account.
Amy Augenblick swears she isn't as traditional as she sounds. She and her husband, Walton Smith, both 43, are saving for retirement together. They both go to the financial planning meetings with their financial advisor--they've known him for decades, she tells me--but, the truth is, she's just not that interested.
My visit with Jason followed on the heels of some extensive research I was involved in, to gain a better understanding of millennials' financial habits. In addition, we also investigated the role (or lack thereof) a financial advisor plays in helping millennials plan and save. The results? As varied as their personalities.
Boomers with the assets and support to retire comfortably represent a smaller and smaller segment of the aging population in our country. Hammered by the Great Recession, reduced pension plans, rising healthcare costs, corporate downsizing, as well as by ageism and reduced opportunities for employment, boomers are going to be increasingly squeezed financially.
How do we decide what percentage of our income to earmark for retirement? Undoubtedly we think about the bills we have to pay and the medical expenses we might incur. This is a solid start -- but how many of us are thinking about the lifestyle we hope to have and the unpredictable realities that we may face during our retirement?
We're not suggesting that everyone who gives retirement investment advice is taking advantage of their clients, since many advisers do act in their client's best interest. But, because the law does not require them to do so, far too many do not. That's why the President's recent action is so important.
Ever since the Department of Labor proposed several years ago to close regulatory loopholes that allow financial firms to offer conflicted retirement advice without having to act in the best interests of the retirement savers who rely on that advice, financial services firms have been nearly apoplectic in their opposition.