PLANADVISER - March/April 2018 - 20
trendspotting
Avoiding Financial Shocks
By cutting back, retirees can absorb money-related hardships
THE latest analysis from the Center for
Retirement Research (CRR) at Boston
College asks the critically important
but difficult to answer question,
" Will the financial fragility of retirees
increase? "
To find an answer, researchers
first examined the share of expenditures
that a typical elderly household
devotes to basic needs. Next, they
TALKING POINT
Sense of Security
Fifty-eight percent of middle-income
workers, defined as those with household
incomes between $35,000 and $150,000,
say they feel more financially secure
because of workplace benefits.
Source: MassMutual Workplace Benefits Study
20 | planadviser.com march-april 2018
Art by Tim Peacock
reviewed evidence on the ability of
today's elderly to absorb two major
shocks-namely, a spike in medical
expenses and a decline in income when
widowed. Finally, researchers considered
the dependence of today's and
tomorrow's elderly on personal financial
assets-particularly 401(k)s and
other retirement accounts-mapping
anticipated dependence against the
sufficiency of assets.
Researchers conclude that " most
current retirees can absorb a shock. "
However, they warn in no uncertain
terms that future retirees are more
likely to experience financial fragility,
unless they dramatically reduce their
fixed expenses or draw increased
income from their assets.
The CRR analysis points to a
number of studies to demonstrate that
nearly 80% of the spending of a typical
elderly household is used to secure five
basic needs: housing, health care, food,
clothing and transportation. These
needs account for an even greater
share of the expenditures of lowerincome
households, single individuals
and households that rent or have an
outstanding mortgage.
" Households could cut back on
entertainment, gifts and other nonbasic
items, including cable TV or a
cell phone, " researchers say. " Spending
on basic needs could also be trimmed.
These
figures
suggest
that
typical
retirees cannot cut expenditures by
more than about 20%. " -John Manganaro
http://www.planadviser.com
PLANADVISER - March/April 2018
Table of Contents for the Digital Edition of PLANADVISER - March/April 2018
2018 PLANSPONSOR Retirement Plan Adviser of the Year
Battling the Elements
Taking on Discretion
A QDIA In Transition
Working Down-Market
Retirement Income Options
2018 SEC Examination Priorities
Enforcement of the DOL Rule
Duty to Investigate
PLANADVISER - March/April 2018 - C1
PLANADVISER - March/April 2018 - FC1
PLANADVISER - March/April 2018 - FC2
PLANADVISER - March/April 2018 - C2
PLANADVISER - March/April 2018 - 1
PLANADVISER - March/April 2018 - 2
PLANADVISER - March/April 2018 - 3
PLANADVISER - March/April 2018 - 4
PLANADVISER - March/April 2018 - 5
PLANADVISER - March/April 2018 - 6
PLANADVISER - March/April 2018 - 7
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PLANADVISER - March/April 2018 - 9
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PLANADVISER - March/April 2018 - 21
PLANADVISER - March/April 2018 - 22
PLANADVISER - March/April 2018 - 23
PLANADVISER - March/April 2018 - 2018 PLANSPONSOR Retirement Plan Adviser of the Year
PLANADVISER - March/April 2018 - 25
PLANADVISER - March/April 2018 - 26
PLANADVISER - March/April 2018 - 27
PLANADVISER - March/April 2018 - 28
PLANADVISER - March/April 2018 - 29
PLANADVISER - March/April 2018 - 30
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PLANADVISER - March/April 2018 - 36
PLANADVISER - March/April 2018 - 37
PLANADVISER - March/April 2018 - 38
PLANADVISER - March/April 2018 - 39
PLANADVISER - March/April 2018 - Battling the Elements
PLANADVISER - March/April 2018 - 41
PLANADVISER - March/April 2018 - 42
PLANADVISER - March/April 2018 - 43
PLANADVISER - March/April 2018 - Taking on Discretion
PLANADVISER - March/April 2018 - 45
PLANADVISER - March/April 2018 - 46
PLANADVISER - March/April 2018 - 47
PLANADVISER - March/April 2018 - A QDIA In Transition
PLANADVISER - March/April 2018 - 49
PLANADVISER - March/April 2018 - Working Down-Market
PLANADVISER - March/April 2018 - 51
PLANADVISER - March/April 2018 - Retirement Income Options
PLANADVISER - March/April 2018 - 53
PLANADVISER - March/April 2018 - 2018 SEC Examination Priorities
PLANADVISER - March/April 2018 - Enforcement of the DOL Rule
PLANADVISER - March/April 2018 - Duty to Investigate
PLANADVISER - March/April 2018 - C3
PLANADVISER - March/April 2018 - C4
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