PFP2214. A Goals-Based Approach to Retirement Income Planning

To submit a question or participate in polling, click the link above. 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:

• Evaluate the tradeoffs of creating portfolio income in retirement
• Create a goals-based process to build retirement income from investments
• Recognize the value of various financial instruments in meeting spending goals