An Overview of Market Risks for Near-Retirees and Retirees – Center for Retirement Research

The report’s key findings are:

• People increasingly rely on 401(k) assets for retirement, so they need a good understanding of market risk.
• New survey results of older retirement investors show that many are too pessimistic about stocks: they underestimate returns and overestimate risks.
• However, comparable data suggest that their actual stock allocations are higher than their stated preferences. 
• This mismatch may reflect the growing role of target date funds as the 401(k) default, which may benefit investors given their pessimistic views on stocks.
• Financial advisors could also play a constructive role, but it depends on the extent to which clients heed their advice.