Reality Check

“The hardest thing for an adviser is to hit these people over the head with a reality check,” says Scott Ciullo, a retirement plan adviser at Raymond James Financial Services, Inc., in Marquette, Michigan, of talking these days with participants age 50 and older who fall far short of their retirement-savings targets. “These are hard conversations to have—to tell someone who is 55 years old and wants to retire at age 62, ‘You are going to have to live on $20,000 a year, so you need to lower your expenses and plan on selling your house.’ It is especially hard with guys and ladies who have done the right thing and put money in.”

Many Boomers have counted on their house as a large part of their retirement nest egg, says David Rosnick, a CEPR economist who co-authored its report. “Overall, they did not have a whole lot saved before the crash,” he says. “[Many] expected to cash out and move into something smaller, like their parents did,” says Deena Katz, co-author of the book Retirement Income Redesigned: Master Plans for Distribution: An Adviser’s Guide for Funding Boomers’ Best Years and Chairman of Coral Gables, Florida-based Evensky & Katz Wealth Management. “The things that Boomers depended on are not there anymore.”

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