If you've sneaked a peek at your 401(k) plan or IRA account values recently, it was likely a feel-good (or feel much better) experience. The epic 8-year-old bull market has sent the S&P 500 up more than 300 percent from its March 2009 low and plumped up our collective retirement prospects.
Not to be a total killjoy, but the endorphin kick from staring at fatter account balances could also be triggering some dangerous retirement magical thinking.
More than 80 percent of workers recently surveyed by BlackRock expect their retirement account returns will continue to match or exceed the returns of the past.
That's a tall order.
The 19.5 percent annualized rate of return for the S&P 500 during this bull market is already nearly double the 10 percent long-term norm going back to 1926. And even 10 percent is asking too much given where valuations are today and the long odds that there's some magic economic growth potion that can support valuations moving a lot higher. A host of heavy-hitter investment firms, including BlackRock, GMO and AQR are on the record that over the next 10 years returns could be less than half their long-term average.
And bonds aren't going to be able to keep up either.