Retirement Strategy: Lifestyle Over Wealth
The key to managing longevity risk lies in recognizing the impact of lifestyle and mindset on a client's retirement outlook, according to a panel of financial advisers.
“It’s all relative”
Emerald Private Wealth director Rachna Chandna emphasized that understanding a client's existing lifestyle is crucial in assessing longevity risk. She noted that
“Even though they have a lot, it’s all relative because their spending patterns are equivalent to their capital”.
Chandna recommended the "bucket approach strategy" to manage longevity risk, which involves protecting the immediate term with cash, fixed-term annuities, or bonds, before focusing on long-term planning.
Author's summary: Lifestyle drives retirement strategy over wealth.
- Longevity risk depends on lifestyle and mindset
- Understanding client's existing lifestyle is key
- Bucket approach strategy for managing longevity risk