HOW RETIREMENT INCOME PREFERENCES
INFORM RETIREMENT INCOME STYLES

By Alejandro Murguía and Wade D. Pfau

Research Overview

RETIREMENT INCOME SERIES — PART 2 OF 3

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.

We examine the four broad investment strategies that compromise the RISA Matrix: Total Return, Income Protection, Risk Wrap and Time Segmentation and discuss the application of these approaches to ensure that advice for funding retirement is offered that resonates with clients.

Read the Full Paper

About the authors

Alejandro Murguía, Ph.D. is Managing Principal of McLean Asset Management, Retirement Researcher, and co-founder of RISA, LLC.

Wade D. Pfau, Ph.D., CFA, RICP, is a Professor of Retirement Income at The American College of Financial Services. He is also a Principal at McLean Asset Management, Retirement Researcher, and co-founder of RISA, LLC.

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