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Can You Retire Your Retirement Risk?

Aug. 01, 2018 2:30 PM ET2 Comments

By Michael Doshier, Vice President, Retirement Marketing

What comes to mind when you think about retirement? Traveling? Spending time with friends and family? Engaging in your favorite hobby? While Social Security can help, it often isn’t enough to cover day-to-day living expenses, let alone to enjoy these and other activities. For those who have not saved enough or invested wisely, retirement can bring a lot of stress. But it doesn’t have to be that way. Let’s look at the roots of some of today’s retirement income anxiety, and what can be done to help alleviate it.

Addressing Retirement Anxiety

Traditional defined benefit (DB) pension plans—which promise to generate a secure source of income in retirement—provided many individuals with reliable retirement income for decades. But they are going the way of the dinosaurs. In 1979, 28% of private sector workers participating in one type of retirement plan had a DB plan.1 By 2014, a mere 2% of private-sector workers participated in a DB plan.2

Of course, the reason DB plans have been disappearing is that private employers have been shifting to defined contribution (DC) plans. These self-directed investment vehicles have provided many individuals with a healthy retirement nest egg. Millennials in particular have embraced them, being the first generation to fully benefit from the sweeping reforms of employer-sponsored plans under the Pension Protection Act of 2006.

Nonetheless, the fear of falling short remains a point of anxiety for many individuals, particularly those who don’t have access to these plans, who haven’t managed to save enough or who have made poor investment decisions.

Each year Franklin Templeton surveys individuals’ thoughts about retirement in our “Retirement Income Strategies and Expectations (RISE) Survey.” In the 2018 survey, running out of money was cited as the top concern of respondents across all age groups.

This article was written by

Franklin Resources, Inc. (NYSE: BEN) is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2 investment teams. The San Mateo, CA-based company has more than 65 years of investment experience and over $908 billion in assets under management as of May 31, 2014. For more information, please call 1-800/DIAL BEN® or visit franklinresources.com.

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