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.
what's in the client's mind can be as important as how much money they have
Rachna Chandna, director of Emerald Private Wealth, emphasized the importance of understanding a client's existing lifestyle in assessing longevity risk. She noted that
it's all relative because their spending patterns are equivalent to their capital
Chandna's approach involves a "bucket approach strategy", where immediate term needs are protected through cash and fixed-term annuities or bonds, followed by long-term planning.
- Understanding the client's lifestyle and mindset is crucial
- Spending patterns can be equivalent to capital
- Bucket approach strategy for managing longevity risk
Author's summary: Lifestyle drives retirement strategy.