The WEF report also highlights the inadequacy of traditional retirement plans to meet the complex and emerging needs of today’s retirement savers and called on both individual savers and government policymakers to ensure that private and state retirement investments are able to provide for retirees for the duration of their lifespans.
The situation in the United States
According to the WEF report, simply having a 401k or an IRA may not be enough to provide cashflow throughout an individual’s retirement; the report says that in the United States men can expect to outlive their savings by an average of eight years while for women, who have an even longer life expectancy, the shortfall is even starker.
On its website**, the WEF warned, “The average retiree in Australia, Canada, Japan, the Netherlands, the United Kingdom, or the US will not be able to last through retirement on savings alone.”
Furthermore, the WEF said that it is up to governments and retirement savers alike to pursue alternative retirement strategies, including early uptake of regular savings plans.
It also expressed concerns that “many people are far too risk-averse in their retirement investing”, adding that a prudent approach should include ensuring that pension savings are sufficiently diversified across multiple asset classes in order to mitigate overall investment risk.
Furthermore, said the WEF, “sound financial advice, investment in alternative assets, particularly illiquid assets, can bring strong diversification benefits to a retirement investment portfolio.” **
Retirement Planning with Blacktower (US) LLC
Many wealth managers advise their clients on the basis that once they reach retirement they will withdraw 4% of their portfolio. However, the WEF cautions that this projection often fails to meet the reality of how people actually spend their money – with most retirees typically spending more at the beginning of their retirement and less as they get older.
At Blacktower (US) LLC, we believe that whoever you are and whatever your situation, it is essential your retirement plans account not only for the likelihood of you living longer than previous generations but also that your spending habits and unique cross-border financial situation are taken into account in any financial advice we provide.
We work to ensure your financial preparedness so you can move towards your financial goals and retirement years with confidence.
Taking action early is imperative if you are to enjoy the best possible retirement. Speak with us today for more information about how we may be able to help you achieve a more secure financial future.
* https://www.blacktowerfm.com/images/docs/WEF_Investing_in_our_Future_report_2019.pdf Accessed 20-06-19
** https://www.weforum.org/press/2019/06/retirees-worldwide-will-outlive-their-savings-by-a-decade-and-women-will-fare-worse/ Accessed 20-06-19
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Investment advice and investment advisory services offered and provided through Blacktower Financial Management US, LLC. This communication is for informational purposes only based on our understanding of current legislation and practices which are subject to change and are not intended to constitute, and should not be construed as, investment advice, tax advice, tax recommendations, investment recommendations or investment research. You should seek advice from a professional before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.