In the wake of the dot.com bubble bursting in 2000, many American companies stepped back and took a long, hard look at the structure of their pension obligations. For the first time in a very long time, the real risks of making long-term promises to employees in the face of plummeting asset values, increasing competition, and volatile markets became quite real, as many companies were either careening towards bankruptcy or already in the throes of a meltdown. Others feared that they might be next.

As a result, many firms chose to move the obligation (and risk) for retirement planning away from the rms and on to the backs of employees. is was a seismic shift, as retirement planning had always been referred to as a ‘three legged stool’, consisting of pensions, social security, and personal savings and investments.

When the next bubble hit in 2009, it only exacerbated the problem. Personal savings fell, and even more firms faced bankruptcy, went out of business, or laid people off.  Millions lost their homes, their jobs, and their pensions. The shift to defined contribution plans, instead of defined benefit plans, had finally reached critical mass. Many people started to understand fully that, if they were to retire as their parents and grandparents had, they would have to figure it out on their own.

The primary issue is one of education and understanding. What should we focus on when it comes to retirement planning? Just as important, what are the risks we face when doing so? An article in The Harvard Business Review, “The Crisis In Retirement Planning (Harvard Business Review, July – August 2014), summed it up nicely when it stated, “Our approach to saving is all wrong: We need to think about monthly income, not net worth.” This statement comes from the article’s author, Robert C. Merton, Nobel Prize winner.

My 23 years of practicing in the retirement planning arena had long ago convinced me that monthly income is indeed the critical factor in retirement success. I would also say that personal health and fitness, both mental and physical, is the second half of the retirement happiness equation.

However, having adequate monthly income is often the precursor to health and well-being. In fact, the American Psychological Association’s “Stress In America” survey results for 2014, shows that 72% of adults report feeling stressed about money at least some of the time, and 22% say that they experience ‘extreme stress’ about money. Top reported triggers include: paying for unexpected expenses, paying for essentials, and saving for retirement. (American Psychological Association, February 4, 2015; American Psychological Association Survey Shows Money Stress Weighing on Americans’ Health Nationwide).

According to APA CEO and Executive Vice President Norman B. Anderson, PhD speaking about the study: “Regardless of the economic climate, money and finances have remained the top stressor since our survey began in 2007. Furthermore, this year’s survey shows that stress related to financial issues could have a significant impact on Americans’ health and well-being. Indeed, stress about money and finances has a significant impact on many Americans’ lives. Some are putting their health care needs on hold because of financial concerns. Nearly 1 in 5 Americans say that they have either considered skipping (9 percent) or skipped (12 percent) going to the doctor when they needed health care because of financial concerns. Stress about money also impacts relationships: Almost a third of adults with partners (31 percent) report that money is a major source of coflict in their relationship. So, solving these retirement income challenges is crucial, if we are to have any expectation of a long, healthy, and happy retirement. There are seven key risks that retirement income planners have to take in to account if we are to properly prepare.