Texas Tech University

Opinion: Who is looking out for your retirement?


September 16, 2020

MarketWatch - OK, would-be retirees. Do you want the bad news, or the bad news? The bad news is that no one has ever faced a bigger or more difficult retirement challenge than those planning for it today. You’ll live longer after working longer than previous generations (OK, that’s good news, but it makes the finances much harder), you’ll face skyrocketing health care costs during your old age, and the Social Security, Medicare and Medicaid safety network you’re relying on is under sustained attack.

As long ago as 2013, Morningstar's David Blanchett, Texas Tech University's Michael Finke and the American College's Wade Pfau pointed out that this rule was wildly out of date. It stemmed from a world when intermediate bonds yielded 5.5% on average and stocks traded on a Shiller PE (again) of around 16, they noted.

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