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The New Retirement Rulebook

Send says the call for better choices is amplified as retirees needing to make money last throughout a longer life are stuck with having to either work longer or lower their standard of living because their investments haven't kept pace with need.

"There is some discussion about wage replacement," she says. "Do you really need to replace 70% to 80% of your pay? Well, if you really want to retire badly enough you are going to figure out a way to do it on 60% if that is all you can do."

There may not be much current retirees can do given the corrosion of their assets caused by market motion in the past few years, Send says. Her hope is that younger generations see the need to plan for retirement much earlier.

"The thing we are seeing is that younger Americans are more leery about investing in equities and they shouldn't be," she says. "I always say to folks, 'Repeat after me ... you are too young to care ... you are too young to care. Just keep repeating that mantra and you'll be fine.' Yet they are hearing horror stories and with today's media you just get it everywhere and then they are hearing grandparents and parents talking about how they lost thousands of dollars. The young ones are getting scared away, and I think that's a mistake."

"That's where that investment menu in the 401(k) world becomes very important -- because of our natural tendencies, that inertia and the whole 'set it and forget it,'" she adds. "If we know that's the tendency, then it's important for the plan sponsor to offer an investment menu that fits today's new realities. We need to understand that whatever employees pick will really determine what their returns are going to be. I don't mean is it a good fund or a bad fund. I mean the whole asset allocation. We need to make sure that a younger participant has the ability to get kind of a new-world asset allocation, and I don't think a lot of 401(k) plans measure up like that today."

"Even if you've given up on investing, that doesn't mean you should give up on savings," is the warning of David Hefty, co-founder of Hefty Wealth Partners. "They are two different things. People equate their 401(k) to the stock market. Last time I checked, every 401(k) in the country has some type of fixed-income option. There are people who are not even getting their company match. My goodness, how many self-inflicted wounds can they give themselves?"

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