4 Dangerous Assumptions That Could Hurt Your Retirement Plan

And how to make sure they don’t. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=38368&elqTrackId=732edd38367b4c1eb0a8b501efebda21&elq=f9068fd1c683438db1da143c1d8ba4be&elqaid=38368&elqat=1&elqCampaignId=17990) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] In talking with people about their money and their retirement plans, I’m often surprised at how much people trust but don’t verify. The rely on outdated information (“exchange-traded funds are risky, right?”) and overly broad assertions (“annuities are terribly expensive”) to guide important decisions. In [this week’s column]( I took a look at 4 dangerous assumptions that can derail a retirement plan, and discussed what to do instead. One of these assumptions—assuming that investment returns will always be robust—is top of mind in this year’s crummy market. Regular readers know that when those bad investment returns occur during retirement is important—it’s what retirement researchers call “[sequence risk]( It’s a bigger deal if bad returns occur just before or early on in your retirement than if the market falls when you’re 85. What’s interesting, as [John Rekenthaler explored in a column]( this week, is that the sequence of returns doesn’t just matter in retirement; it also matters during the accumulation period, and it’s really just luck of the draw. If there’s a good news story in all of this, it’s that weak returns mean lower valuations, which in turn boost the forward-looking return prospects for stocks. Bond-return expectations have also gotten a boost from rising interest rates, even though bond prices have fallen so far this. I discussed [my latest wrapup of investment providers’ capital markets forecasts]( incorporating recent market action, in [a conversation with my colleague Susan Dziubinski](. Finally, I got a lot out of [the conversation that Jeff Ptak and I had with author Cameron Huddleston]( who’s passionate about the topic of communicating with older adults—especially aging parents—about financial and estate planning matters. A financial journalist who spent several years caring for her mom as she experienced cognitive decline, Cameron shared practical insights for older adults and their children. One thing was clear from the conversation: We need to talk about this stuff, even if it’s difficult. I hope you enjoy the long weekend and make the best of these waning days of summer. With warm regards, Christine Benz [4 Dangerous Assumptions That Could Hurt Your Retirement Plan]( By the time retirement savers realize the error of their ways, it may be too late. [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [How to Create a Long-Term-Care Plan]( Who needs a long-term-care plan, self-funding versus insurance, and key nonfinancial issues to consider. [Watch Now]( [Talk to Your Parents About Their Finances]( Personal finance journalist and author Cameron Huddleston discusses the importance of communicating with older adults about estate planning, long-term care, and the dangers of financial fraud. [Listen Now]( [How to Use Forecasts of Stock and Bond Market Returns]( Our latest roundup suggests better days may be ahead for the markets. [Watch Now]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2022 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602