A Goals-Based Approach to Retirement Income Planning

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The traditional 4% rule assumes that retirees can withdraw a fixed amount from a volatile investment portfolio. In a world of increasing longevity and lower expected asset returns, this approach to funding retirement income is neither safe nor optimal. This presentation instead uses a goals-based approach that matches investments with expected retirement spending. I discuss new research that demonstrates how investment risk affects spending variability in retirement spending, how spending changes over time, how advisors can better match their investments to meet spending goals, and the tradeoff of various investment and product strategies.

​Learning Objectives

Upon successful completion of this course, you will confidently be able to:​

• Develop a 4-step goal-based process that gives clients greater clarity about how their investments translate into lifestyle tradeoffs in retirement.
• Understand how investment risk requires a willingness to adjust spending when returns are below expectations.
• Create a goals-based spending plan that defines inflexible and flexible spending goals.
• Evaluate the cost of funding inflexible spending through bonds through old age versus the cost of funding the same liability with an annuity.

Presenter

Michael Finke, PhD, CFP^®

CFP^® CE Credit

This content is eligible for one hour of CFP^® continuing education (CE) credit.

If you hold the CFP^® mark and would like to receive CFP Board CE credit for this content, please ensure your CFP^® ID number is entered here.

The College’s Professional Recertification Program (PRP)

This content is eligible for one hour of PRP continuing education credit.

To begin, click on the button below. As you move through the content, make sure to mark each page complete by clicking on the appropriate button, and then click Next Lesson at the bottom of each page. Once you complete the entire activity, the progress bar will show 100%.

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