This week Jim and John cover the subject of why retirement plans fail, and if we are facing a crisis in retirement planning. One of the things we do know is that many of the securities that once existed in retirement are no longer around. The defined benefit pension plans that provided a monthly pension to retired workers are mostly gone, replaced by the 401(k) defined contribution plans. In addition, the markets are not helping retirees, with 0% interest rates in recent years, and Treasury bond interest rates that have been steadily declining for over 30 years. In addition, retirees are living longer today, so the chances of going broke in your later years have gone up substantially. Jim and John discuss why retirement plans fail, and what a retiree might do to increase the odds of a successful retirement. The guest this week is Professor Robert Merton, Distinguished Professor of Finance at MIT Sloan School of Management and recipient of the Alfred Nobel Memorial Prize in Economic Sciences in 1997. Professor Merton has written extensively about a coming crisis in retirement planning.
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