Most people know Alison Schrager from the title of her book “an economist walks into a brothel” so I’ll advertise her excellent article on “re-thinking retirement” with her book’s cover which you can buy here from Amazon
It’s rather harder to get to her thoughts on retirement which are generally stuck behind a Bloomberg paywall, but they are republished in Financial Adviser (the American version)
Three Myths About Investing For Retirement, from @AllisonSchrager https://t.co/pqtVpctlos
— Andrew G. Biggs (@biggsag) December 28, 2023
From which we discover that Americans are
- Obsessed with the idea that “The goal of retirement finance is to maximize the return of your portfolio”.
- Convinced that A retirement crisis is inevitable because most people have not saved enough.
- Deluded into thinking Social Security will be fine, but you won’t get it.
Her three myths are the same three myths that beset many affluent people in the UK.
The canny Schrager expands on (1)
The idea of maximizing returns is the original sin of retirement investing. I blame the evolution of wealth management.
My views on how we undervalue pensions and overvalue pots are well know
Schrager dismisses (2) as alarmism from those who manager our savings
The bottom line is that today’s retirees have a better standard of living than previous generations did.
And finally (3) Schrager reminds Americans that
Yes, Social Security is in trouble and needs to be reformed, ideally with some combination of higher taxes, lower benefits and a later retirement age. But no matter what happens, pretty much everyone alive today will get their benefits in some form.
It’s refreshing to be able to read such a sensible article on retirement saving. The American approach is broadly similar to ours. They actually have a better Government pension and a rather shonky version of our workplace pensions. People are better off in the States because the Country is more productive and the economy growing faster.
Americans’ insecurities about retirement are the same as ours and the myths that they labour under, provide the same unnecessary distress.
I’d urge you to click through to Allison’s article – before it goes behind another paywall -sometimes the best financial advice is free!
