Investment advisors are recommending unrealistic retirement goals

Jan 19, 2016, 07:00 ET from Morneau Shepell US

New book debunks conventional financial advice

ATLANTA, GA, Jan. 19, 2016 /PRNewswire/ - Most financial advisors and mutual fund companies are recommending unrealistically high retirement income targets, and in the process are fostering unwarranted anxiety among savers. This is one of the key conclusions in a new book, The Essential Retirement Guide: A Contrarian's Perspective, by Frederick Vettese, Chief Actuary of human resources consulting and technology firm Morneau Shepell.

"The financial services industry continues to assert that one's retirement income should replace 70 to 80 percent of final pay, a target which is clearly wrong for the majority of savers", says Frederick Vettese, Chief Actuary of Morneau Shepell. "Hardly anyone outside of public sector plans ever reaches 70 percent and yet surveys show that the vast majority of retirees feel they retired at the right time."

Vettese goes on to say, "One is tempted to wonder whether the overstatement stems from the fact that the financial services industry makes more money when people save more. More likely though, it is a case of incomplete analysis coupled with the mistaken notion that one cannot go wrong by over-saving. For the kind of investors that the retirement industry is targeting, the true retirement income goal is closer to 50 percent of pay."

The book describes the various reasons to question the conventional wisdom and explains how one can translate the real income target into the lump sum amount one will need to produce a comfortable retirement. The Essential Retirement Guide: A Contrarian's Perspective, ISBN: 978-1-119-11112-2, was released by John Wiley & Sons in December.

About Morneau Shepell Inc.

Morneau Shepell is a North American company with global reach offering an integrative approach to health, benefits, retirement and employee assistance needs. In the United States, Morneau Shepell provides expertise in benefits, retirement, employee assistance and wellness programs with a highly flexible technology platform that improves its clients' performance. With 50 years of experience, the Company has almost 4,000 employees and serves approximately 20,000 clients ranging from health plans, small businesses, large corporations, associations, unions, and local and state governments. For more information, visit

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