Changing The Conversation About Retirement Income Strategies

RISA and the Retirement Income Institute release groundbreaking three-part research series

January 11, 2023 10:08 AM Eastern Standard Time–MCLEAN, Va.–(BUSINESS WIRE)–Today, RISA^® (Retirement Income Style Awareness), the psychology-backed, research-driven income personality assessment transforming retirement income planning, and the Retirement Income Institute of the Alliance for Lifetime Income – a non-profit consumer education association that creates awareness and educates Americans about the value and importance of having protected income in retirement, announced the release of a three-part research series that changes the conversation about retirement income strategies. The research, which was commissioned by the Retirement Income Institute and authored by RISA co-founders and retirement income authorities Alex Murguia and Wade Pfau, turns traditional retirement income planning on its head by first focusing on the consumer and their preferences.

“This research gives us valuable and important insight into consumer behaviors and preferences that can help financial advisors develop practical retirement income strategies, customized to each individual,” said Jason Fichtner, a Senior Fellow and Head of the Retirement Income Institute. “Pensions have virtually disappeared and the traditional model for retirement income security may not provide sufficient, reliable and protected retirement income for Americans planning for retirement. A new framework is needed that focuses on how protected income from annuities can provide the retirement security consumers need and are looking for.”

The three-part research series focuses on the critical building blocks of a consumer-first retirement income approach, including:

• Quantifying retirement income beliefs and preferences to determine a retirement income style
• How retirement income preferences inform retirement income
• Identifying limitations of risk tolerance questionnaires when it comes to addressing retirement income concerns

“Throughout the research process, we were able to surface undeniable connections between retirement preferences and retirement styles, and illustrate how these styles indicate the distinct retirement income strategies that resonate most closely with how each individual wants to generate retirement income,” said Wade Pfau. “For example, we discovered that at least two-thirds of consumers are seeking protected income solutions as a significant source of their retirement income.”

The development of the RISA matrix represents the practical application of Pfau and Murguia’s research, bringing together salient psychological concepts and retirement income planning into a systematized process for individuals and advisors to find the protected income strategies that best meet unique preferences.

Unlike in the accumulation phase of their financial journey, individuals in or approaching retirement face different risks that aren’t accounted for using traditional risk tolerance questionnaires. With the RISA, advisors can capture how their clients want to account for these risks and ensure those preferences are considered within their retirement income plan.

“The RISA is changing the retirement income conversation for advisors and their clients,” said Alex Murguia. “For the first time, advisors can accurately identify an individual’s retirement income preferences and easily point them to a solution that accommodates those preferences, empowering the consumer with the knowledge, confidence and peace of mind that this is the right strategy for their retirement goals.”

Driving Growth and Deeper Client Relationships with the RISA

If you’d like to learn more about leveraging the RISA at your practice, join the upcoming two-day retirement income masterclass, Driving Growth and Deeper Client Relationships with the RISA, hosted by Pfau and Murguia on January 23 and 24 from 12 – 1:30 PM. Click here to register!

About RISA

RISA^®, the Retirement Income Style Awareness profile, is built on a retirement income framework that blends psychology and financial planning to help investors identify their unique retirement income preferences. Developed by retirement income experts Alex Murguia and Wade Pfau, the intuitive, easy-to-follow survey considers a variety of factors related to an individual’s feelings about security, flexibility, reliance on market returns, and preference for contractual guarantees to define their tolerance for income risk during decumulation. The RISA empowers financial advisors with the insights they need to implement the retirement income strategies that make the most sense for each individual client. https://risaprofile.com/.

About the Alliance for Lifetime Income and Retirement Income Institute

The Alliance for Lifetime Income is a non-profit 501(c)(6) educational organization based in Washington, D.C., that creates awareness and educates Americans about the value and importance of having protected lifetime income in retirement. Our vision is for a country where no American has to face the prospect of running out of money in retirement. The Alliance provides consumers and financial advisors with educational resources, interactive tools, and actionable research and insights to use in building retirement income strategies and plans. We believe focusing attention and conversations on retirement income that lasts throughout life leads to greater retirement security for millions of Americans. The Retirement Income Institute seeks to shape a future in which Americans are able to retire with a more secure economic future, one with less risk and higher levels of confidence by fostering innovation and reforms that lead to actions that benefit individuals, families and society. The Institute sponsors new research and analysis – supported by data and evidence – that helps generate insights and ideas to secure Americans’ retirement through protected lifetime income. Learn more at www.ProtectedIncome.org.