Unretired

Case Analysis – Unretired

Issue and Problem

Retirement financial security is one of the hot topics today during the economic downturn. A Growing number of people who retired in recent years are finding themselves strapped in the economic downturn. With most of their assets in the stock market, many retirees are forced to return to the workforce. Retirees have a hard time looking for a job or career because of the weak economy. In addition, one survey finds that a large percentage of people make investment decisions by themselves. The goal of this case study is to find out the major cause of this social problem and to provide some solutions to the issue. Moreover, the goal of corrective action is to make sure retirees can retire at their retirement age and have a better financial security.

Evaluation and Analysis

The United States retirement system is established in both public and private sectors for a long time. In general, both employer and employee will contribute to the retirement fund during the employment period. In most cases, the retirement fund will be set aside and handled by investment companies. Large percentages of the fund will be invested into either mutual fund or stocks.

The issue arises with the economic going downhill since the stocks tend to get hit the most. Economic downturn is a normal business cycle which happens in a regular basis. If retirees have most of their retirement funds in stocks, they will bear incredible risks during retirement. In order to lower risk, they should not put all the eggs in one basket. Retirees should have a balance portfolio. Also, many people simply do not know about risk when they are actively making investment decisions.

Solution

Government can impose regulations on all retirement accounts and provide a strict guideline for Asset allocation. A balance portfolio will provide better protection from economic downturn. The retirement fund will reallocate when retirees are approaching...