A Nobel Laureate's Retirement Proposal
The idea is good, but the benefits are overstated.
The Retirement Crisis?
A physicist, a chemist, and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Let's smash the can open with a rock." The chemist says, "Let's build a fire and heat the can first." The economist says, "Assume a can opener."
Nobel Prize winner Robert Merton is an economist. He has published a paper in the current issue of Harvard Business Review titled, "The Crisis in Retirement Planning." Merton's proof of the existence of the crisis is that "putting relatively complex investment decisions in the hands of individuals with little or no financial expertise is problematic." As a result, "the seeds of an investment crisis have been sown." Without intervention, "catastrophe" will occur.