The Retirement Income Series
Join us on a journey to understand exactly how the Retirement Income Style Awareness® Profile (the RISA®) is disrupting the retirement planning industry for the better. This research study was commissioned by the Retirement Income Institute, the research and thought-leadership arm of the Alliance for Lifetime Income. The Alliance is a nonprofit consumer education association that creates awareness and educates Americans about the value and importance of having protected income in retirement.
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Part 1: Quantifying Retirement Income Beliefs And Preferences To Determine A Retirement Income Style
Wealth management has traditionally focused on the accumulation of assets. This accumulation mindset has dominated financial services and public policies with a focus on getting people to save and invest.
Whether this accumulation mindset should continue post retirement is a source of ongoing debate and disagreement. Maintaining a diversified investment portfolio to spend from in retirement is an option, but other options also exist that may better resonate for different individuals- at least when considering funding for core retirement expenses.
Whether this accumulation mindset should continue post retirement is a source of ongoing debate and disagreement. Maintaining a diversified investment portfolio to spend from in retirement is an option, but other options also exist that may better resonate for different individuals- at least when considering funding for core retirement expenses.
It’s important to create a framework which focuses on the unique characteristics of retirement to align individual preferences for retirement income with the strategies used to provide that income.
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Part 2: How Retirement Income Preferences Inform Retirement Income Styles
The value of a common framework to help individuals and their financial advisors develop strategies for managing retirement income is becoming more apparent as the complexity of how best to fund retirement grows. There is mounting evidence that defining retirement income styles as a combination of preferences and then matching strategies to these styles offers a compelling way forward to better align individuals with retirement income strategies that are uniquely suited to their circumstances.
This paper explores the explicit link between retirement preferences and retirement styles, and then documents how these styles link to strategies. The development of the Retirement Income Style Awareness Matrix (RISA® Matrix) tears down the barriers to shared understanding with a systematized way for individuals and advisors to quickly understand whether they are speaking the same language and to find retirement income strategies best aligned with the preferred style.
This paper explores the explicit link between retirement preferences and retirement styles, and then documents how these styles link to strategies. The development of the Retirement Income Style Awareness Matrix (RISA® Matrix) tears down the barriers to shared understanding with a systematized way for individuals and advisors to quickly understand whether they are speaking the same language and to find retirement income strategies best aligned with the preferred style.
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Part 3: Risk Tolerance Questionnaires And Retirement Income Concerns
Pre-retirement and post-retirement financial planning require different approaches, as retirees face the frightening reality that – unless they plan wisely – they may outlive their money. Especially when it comes to determining risk tolerance. This paper asks: how effective common risk tolerance questionnaires (that emphasize short-term market volatility) are when it comes to addressing the concerns that individuals have in retirement and is there a better way?
We explore how the Retirement Income Style Awareness® (RISA®) Profile framework moves beyond investment focused risk tolerance questionnaires and does a better job of capturing individual attitudes and concerns regarding risks related to retirement planning, such as longevity, health care spending risk, general liquidity needs, and lifestyle spending.
We explore how the Retirement Income Style Awareness® (RISA®) Profile framework moves beyond investment focused risk tolerance questionnaires and does a better job of capturing individual attitudes and concerns regarding risks related to retirement planning, such as longevity, health care spending risk, general liquidity needs, and lifestyle spending.
Finally, we examine the ways in which this understanding creates a common language for clients and their advisors, making sense of the many competing views about retirement.
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