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As the baby boomers reach retirement, advisors must solve new problems for clients who aim to sustain their lifestyle over an unknown horizon. Multiple retirement income strategies have emerged and it is hard for retirees to identify which strategies match their personal style. This presentation is based on research that identifies and validates a set of scorable retirement income factors to define preferences for an overall retirement income style. It describes a workable retirement model by showing how the factors connect to four main retirement income strategies: systematic withdrawals with total return investing, risk wrap with deferred annuities, protected income with immediate annuities, and time segmentation. Approaching retirement income agnostically and matching retirement income strategies based on an individual’s personal retirement income style may lead to improved outcomes for retirees. Case studies are provided for how to speak with clients about their retirement income style as a first step in a broader retirement planning engagement. We further consider how financial professionals can implement strategies for different retirement styles and use the framework in practice. We also investigate factors that help identify how individuals seek to implement their financial plans.
Learning Objectives
Upon successful completion of this learning activity, you will confidently be able to:
- Identify various approaches taken for retirement income strategies
- Explain underlying retirement income factors which uncover retiree preferences that coalesce into a retirement income style.
- Link retirement income styles to existing strategic approaches for retirement income that satisfy retiree preferences
- Identify opportunities to engage a couple with different retirement income styles.
- Implement financial strategies to satisfy the preferences of individuals with different retirement styles
- Describe factors that guide individuals toward different approaches for implementing their financial plans
Presenters
Wade D. Pfau, PhD, CFA, RICP®
Alejandro Murguía, PhD
CFP® CE Credit
This content is eligible for two hours 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 two hours of PRP continuing education credit.
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