Contingency Fund: Individual Retiree Risk Management

J. K. Branning and M. R. Grubbs, 'Contingency Fund: Individual Retiree Risk Management,' Journal of Financial Planning, vol. 35, no. 12, pp. 50–55, Dec. 2022.

Posted: 31 Aug 2023

See all articles by Jason Branning

Jason Branning

Modern Retirement Theory

Ray Grubbs

Millsaps College

Date Written: July 3, 2023

Abstract

The goal of this article is to provide an actionable framework for contingency planning for individual retirees through the modern retirement theory (MRT) perspective. Contingency planning encompasses a retiree’s risk management processes, techniques, and strategies, along with a choice architecture. Our goal is to provide insights that are mitigating to those conditions within longevity that can impair or impact a retiree’s ability to remain retired. We offer three risk categories—known, unknown, and unknowable—as an organizational scaffold that demands an intentional choice be made by the retiree. Then, to guide an individual retiree’s decisions about contingency planning, we put forth an active risk selection matrix. The 3-R matrix can be used for guiding and evaluating risk choices through risk recognition, risk reduction, and acceptance of residual risk.

Keywords: contingency fund, retirees, individual retirement planning, emergency fund, risk management

JEL Classification: G22

Suggested Citation

Branning, Jason and Grubbs, Ray, Contingency Fund: Individual Retiree Risk Management (July 3, 2023). J. K. Branning and M. R. Grubbs, 'Contingency Fund: Individual Retiree Risk Management,' Journal of Financial Planning, vol. 35, no. 12, pp. 50–55, Dec. 2022. , Available at SSRN: https://ssrn.com/abstract=4498854

Jason Branning (Contact Author)

Modern Retirement Theory ( email )

P.O. Box 2908
Ridgeland, MS 39158
United States

HOME PAGE: http://www.modernretirementtheory.com

Ray Grubbs

Millsaps College ( email )

Jackson, MS 39210
United States

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