Evensky is a certified financial planner and president of Evensky & Katz Wealth Management.
Require anyone providing investment advice to be held to a true fiduciary standard. As Phyllis Borzi at the Department of Labor points out, there will be trillions of dollars rolling out of pensions, where the funds are professionally managed by fiduciaries, to IRAs, where the primary legal relationship is “caveat emptor.”
- Read other views on this topic from Jack Bogle, Harvey Pitt, Mark Iwry and Alicia Munnell.
Also, based on the success of professors Shlomo Benartzi and Russell Fuller’s behavioral finance “Save More Tomorrow” structure, mandate that 401(k) plans move from “Opt-In” to “Opt-Out” along with automatic contribution increases. And recognize the reality of Pascal’s Wager. It’s not just the probability that matters but also the consequences. It’s easy to say, “the chance I’ll live to 90 is slim, so I figure I’ll only need to plan to 85,” and ignore the consequences of being wrong -- i.e., alive at 86 with no money.
Finally, educate the public so people recognize that the three-legged stool of Social Security, pensions and personal savings is morphing into one-and-a-half legs -- some Social Security and your money. So planning well in advance of retirement is the only way many may avoid financial disaster.
- Special Report: Building a Financial Safety Net