Question: We have a group of plan participants who have asked us for some additional education that covers topics more relevant to employees within 10 years of retirement. Our advisor has set up presentations that cover Social Security, Medicare and income planning. What else might we consider?
Answer: A new research brief from the Center for Retirement Research at Boston College provides data and perspectives that could serve well as content for an educational seminar. “How Well Do Retirees Assess the Risks They Face in Retirement?” finds that retirees do not have an accurate understanding of their true retirement risks, and there’s a large disconnect between how actual and perceived risks are ranked. The analysis finds actual risks should be ranked in this order: 1) longevity, 2) health and 3) market. However, perceived risks are ranked: 1) market, 2) longevity and 3) health. Specifically, Americans ages 50 and older are about three times as worried about market risk as the research modeling suggests that they should be, 50% less worried about their own longevity risk than they should be and 30% less worried about healthcare costs in retirement than they should be. The research also explores family risk, which has received increasing attention. Family risk includes divorce, death of a spouse and adult children becoming ill or unemployed. Click here to access the brief.