An Overview of Retirement Income Strategies

11 Pages Posted: 18 Oct 2016

See all articles by Michael S. Finke

Michael S. Finke

The American College

David Blanchett

Morningstar Investment Management

Date Written: April 1, 2016


This paper provides an introduction to strategies that can be used to turn a retirement portfolio into income. Defined contribution savings present a retirement planning challenge when asset returns, longevity, and spending needs are uncertain. We present the fundamental trade-offs of managing an investment portfolio and decumulating investments in retirement, and we discuss the potential benefit of financial products that address portfolio and spending risks. Simulations illustrate the trade-offs among legacy, liquidity, and shortfall risk. We dis-cuss a comprehensive strategy that combines longevity protection, portfolio allocation, and dynamic spending based on realized portfolio returns to provide a guideline for professionals building retirement income plans for clients. We then provide an overview of the benefits of adding products such as annuities to a traditional investment portfolio to reduce longevity risk and increase expected spending. The primary purpose of this paper is to provide a fundamental overview of current research and theory on retirement income planning.

Suggested Citation

Finke, Michael S. and Blanchett, David, An Overview of Retirement Income Strategies (April 1, 2016). Journal of Investment Consulting, Vol. 17, No. 1, p. 22-30, 2016. Available at SSRN:

Michael S. Finke (Contact Author)

The American College ( email )

Bryn Mawr, PA 19010
United States

David Blanchett

Morningstar Investment Management ( email )

22 W Washington
Chicago, IL 60602
United States
859-492-5637 (Phone)


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