@article {Cohen56, author = {Jonathan E Cohen and Matthew H Scanlan and Matthew O{\textquoteright}Hara}, title = {The Future Shock of Retirement}, volume = {17}, number = {4}, pages = {56--70}, year = {2008}, doi = {10.3905/JOI.2008.17.4.056}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Over the past decade or more, discussions about a possible retirement crisis have ranged from {\textquotedblleft}doomsday{\textquotedblright} to {\textquotedblleft}no crisis at all.{\textquotedblright} An emerging body of literature paints a relatively benign retirement outlook for American workers. In our opinion, however, many of the assumptions upon which this literature depends are inconsistent with current trends. For example, if we make our own informed forecasts about the future of public benefits, principally Medicare and Social Security, and critically examine the assumptions made by other observers about housing wealth, the retirement picture becomes less favorable. In this article we explore potential {\textquotedblleft}future shocks{\textquotedblright} to the American retirement system and what they would mean to the post-retirement living standards for Americans on the doorstep of retirement. These conclusions can be generalized to later cohorts of retirees. Our article has three objectives. First, we examine the current state of American retirement. Second, we assess the fragility of the retirement system by modeling the retiree{\textquoteright}s {\textquotedblleft}economic{\textquotedblright} (market value) balance sheet, performing a sensitivity analysis to evaluate the consequences of potential shocks or surprises affecting the retiree{\textquoteright}s key assets and liabilities. One conclusion of our research is that the variability of retirement preparedness, across individuals, will increase significantly as a result of these potential shocks. Third, we discuss strategies that retirement plan fiduciaries and individuals can implement today to help guard against the increasing instability of retirement.TOPICS: Retirement, social security, wealth management}, issn = {1068-0896}, URL = {https://joi.pm-research.com/content/17/4/56}, eprint = {https://joi.pm-research.com/content/17/4/56.full.pdf}, journal = {The Journal of Investing} }