Sequence-of-returns risk amplifies the impacts of investment volatility when taking distributions from a volatile investment portfolio in retirement. There are four techniques for managing this sequence risk: reduce the spending rate, adjust spending to portfolio performance, reduce portfolio volatility in the early retirement years, and draw from a buffer asset outside the portfolio to support spending when the portfolio is underperforming.
In this session, Harlan Accola, CRMP, and Wade Pfau, PhD, CFA, RICP, will offer an in-depth discussion of how they approach risk retirement income management, and an overview of the practical implementations to managing sequence risk they consider including, delaying Social Security, using annuities with lifetime spending protections, employing a rising equity glide path in retirement, using a time segmentation or bucketing strategy, or creating a “buffer asset” with a reverse mortgage or whole life insurance.
National Reverse Mortgage Director
Fairway Independent Mortgage
Professor of Retirement Income
Financial & Retirement Planning PhD Program
Co-Director, New York Life Center for Retirement Income,
The American College of Financial Services