Commentary

Easing the Retirement Crisis

Steve Wendel

If you're currently working, how do you feel about your path to a comfortable retirement? If you have retired, I hope you're able to enjoy the fruits of your labor, as planned. For many Americans, unfortunately, their retirement simply isn't on track. As a range of studies have shown, nearly half of Americans have nothing saved for retirement, and for those who have saved, most balances are woefully insufficient even if Social Security is fully funded. In a recent EBRI survey, for example, only 17% of American workers felt very confident in their ability to retire comfortably (EBRI 2018).

This week, Morningstar released a new research paper, Easing the Retirement Crisis, in which I analyze the practical actions that individuals and advisors can take to improve this picture. I look at eight levers one could pull: from common topics in investing (increasing net returns, using a more aggressive asset allocation) to issues of financial planning (delaying retirement, adjusting one's standard of living in retirement, allocating more of one’s funds to retirement, increasing contribution rates) to behavioral factors (auto-escalation over time, emotional reactions that forestall investing).