BC Publishes Briefing Paper on Asset Allocation

The Center for Retirement Research at Boston College published a briefing paper this month that provides an abridged, non-technical version of an earlier study entitled, How Important is Asset Allocation to Financial Security in Retirement?

The study, published in April, concluded that financial planners have mistakenly focused on asset allocation when advising clients, rather than a broader range of retirement options, such as reverse mortgages.

The briefing paper states, in part, “The traditional emphasis on the importance of asset allocation might lead one to believe that the best way to improve retirement security is to adopt the perfect mix of stocks and bonds.  However, households nearing retirement have more effective levers available that tend to fly under the radar: delaying retirement, taking a reverse mortgage, and controlling spending.  Each one – particularly working longer – is a more potent alternative than asset allocation for most households.  Thus, financial planners will be of greater service to their clients if they focus on a broad array of tools for boosting retirement security.”