Retirement Income Industry Association

The View Across The Silos


Welcome to the home of the Retirement Management Journal® (RMJ®) and the RIIA Virtual Learning Center.

In this section of the website, you’ll find everything you need to know a out the RMJ® and the VLC, both of which are designed to promote and expand the body of retirement-income knowledge.

Retirement Management Journal
Launched in October 2011, the Retirement Management Journal is the first professional journal designed to promote research, scholarship and innovative thinking on retirement-management and retirement-income topics that contribute to the profession’s and industry’s body of knowledge as well as to the curriculum for RIIA’s Retirement Management Analyst® (RMA®) designation. Members have access to current and past RMJ issues. Founded in large part by the financial support of Allianz Global Investors, this peer-reviewed journal centralizes retirement-income and retirement-management papers and in doing so serves the needs of a wide cross section of professionals, including financial advisers, executives, and scholars. The RMJ also serves to help those who have achieved the RMA designation fulfill their continuing education requirement. Learn more about the RMA.

The Virtual Learning Center is the industry’s premier resource for web-based live and archived lectures and presentations on retirement-income research, products, and strategies for the benefit of personnel at home offices and institutions and financial advisers.

Bank of America/Merrill Lynch is the 2014 – 2016 exclusive sponsor of the Virtual Learning Center’s webinar series.

Learn more about the Virtual Learning Center

The Retirement Management Journal is a publication of RIIA.

Letter From The Editor

The Retirement Management Journal Vol 5 - 2First things first – Congratulations, RIIA®, on 10 years of discovering, validating and teaching the new realities of retirement from the perspective of “The View Across the Silos℠”! There has been significant progress made towards the goal of achieving better retirement outcomes for clients. It is truly an honor to write the Letter from the Editor for this issue of the Retirement Management Journal®.

Inside this issue, sponsored by PricewaterhouseCoopers LLP, you’ll find an anthology of short essays from visionaries on what they see the next decade may bring to the retirement industry. In addition, we have a new paper from Dr. Wade Pfau, former Curriculum Director for RIIA. This paper, underwritten by OneAmerica and shared here by permission, demonstrates the value of leveraging two traditional insurance products to achieve better outcomes.

Having been involved with RIIA since its founding, I am amazed not only at how well RIIA has focused on its core mission, but how astute the organization has been in early identification of major trends that would impact and change the financial industry, including:

  • The market shift from accumulation to distribution
  • That trillions of dollars of retirement savings would move
  • Large market segments lacked convenient access to the products, tools and advice that would be best positioned to meet their needs
  • Existing asset accumulation products, tools and processes would be inadequate for providing income generation
  • Early income generation products, tools and processes would not be sufficient to meet client needs

As the industry acknowledged the changes and increasingly added income creation to its repertoire, RIIA continued to lead the way. Its contributions have included core concepts such as the Household Balance Sheet View℠ and Retirement Allocations, as well as the robust Retirement Management Analyst® designation.

What might the next decade hold? Turn the pages in this issue of the RMJ® and envision the future with…

The Retirement Income Industry Association®
We’ve included an update to RIIA’s 2006 Founding White Paper. It’s not only a look back at the association’s evolution – RIIA provides guidance on where it sees new focus and trends developing.

The Practitioners
Hear from advisers and their advisers on the challenges of meeting the responsibilities of advising in the future, the need to change business models, products and structures to deliver future retirement
solutions and why the question of future generations will be, “Grandpa, what is retirement?”.

The Academics
In this section, 4 academicians raise questions to uncover what’s needed in the future, recommendations for key changes in products and services and a look at a how energy can impact future retirement.

The Researchers
What does the data tell us about the retirees of today and tomorrow, what tools are needed for the “New Retirement Journey” and who are the stakeholders in the evolution of retirement and retirement planning?
Our researchers share their insights.

The Industry
The view from inside the industry is shared by our 4 authors in this section about what they’ve learned and what they see as changes needed to deliver continued profitable growth with quality customer outcomes.

As always, Robert Powell, editor, and the RMJ staff and volunteers thank you for supporting the RMJ. Please consider submitting papers for consideration in future issues and, members, don’t forget to distribute the PDF version of the RMJ to your constituents.

Kim McSheridan, RMA®
Assistant Editor

Spring 2015 Letter from the Editor

Where to begin? There’s so much going on in the world of retirement planning it seems almost impossible to find solid answers for the questions challenging advisers and consumers as the business of spending an accumulated nest egg becomes a reality for more people every day.

To help you make sense of it all, this issue of the Retirement Management Journal® (RMJ®) showcases tools developed by the Retirement Income Industry Association® (RIIA®). In particular, you’ll see signposts that highlight the RMA® curriculum as well as discussion of the Household Balance Sheet View℠.

The selected papers focus on two of the four signposts introduced in the Winter 2014 RMJ: the RMA Toolbox and the Client Diagnostic Kit. Further definition and understanding of RIIA’s Advanced Adviser Education can be garnered from RIIA’s website.

Now, to the papers… I am proud to announce that Dirk Cotton, author of The Retirement Café blog and owner of JDC Planning, LLC, in Chapel Hill, N.C., is the winner of this year’s Practitioner Thought Leadership Award. In his paper, “Sequence-of-returns Risk: A New Way of Looking at Spending or Saving Scenarios with Path Dependence,” Mr. Cotton notes that financial advisers would be well served to better understand sequence-of-returns (SOR) risk. But not in the usual way.

To some, Mr. Cotton writes, SOR risk means the probability that a retiree will outlive her retirement savings portfolio as a result of a series of poor portfolio returns soon after retiring. To others, it refers to the variance of portfolio terminal portfolio values resulting from path dependence, whether or not that variance results in portfolio failure.

What is path dependence? According to Mr. Cotton, path dependence refers to spending or saving scenarios in which portfolio value is a function of the order of portfolio returns. “Path dependence can lead to portfolio ruin, but it doesn’t always,” Mr. Cotton wrote. “Path dependence can even increase a portfolio’s balance beyond its expected value. Path dependence can help or harm, but in either case it is uncertain, and that is the financial definition of risk.”

Two papers about systematic withdrawal plans and how to improve them also deserve your attention. One is written by a team of authors from PricewaterhouseCoopers (PwC) and the other written by a team of authors from Milliman.

Leveraging agent-based simulation and their unique Retirement Income Model, the PwC team presents an alternative to the time honored and often-misunderstood 4% safe withdrawal rate. They highlight the importance of managing a client household’s “fundedness”, rather than focusing on a withdrawal rate. The PwC paper highlights the importance of differentiating recommendations by market segment and taking into account a client’s entire household balance sheet, household behaviors, sequence-of-returns and sequence-of-consumption risks, the impact of capital markets, the economy and shocks rather than focusing on a market-driven withdrawal rate.

The team of authors at Milliman explores how to improve upon the sustainable withdrawal rate. In their paper, they present a stochastic modeling approach to calculate a sustainable withdrawal rate derived from two risk management strategies: 1) the traditional 4% rule approach, which uses fixed allocation to stocks, and a large allocation to bonds, to generate income and manage risk, and 2) the managed risk 6% rule approach, which relies on managed risk equities to generate income and manage risk.

In their paper, Milliman further illustrates that the key to creating a sustainable retirement income, and overcoming the fear of running out of money in retirement is rooted in the effective management of three fundamental risks facing retirees: market risk, inflation risk and longevity risk.

Continuing the theme of bringing solutions to making the nest egg last, we have a paper from TIAA-CREF, “Thinking Past Savings: Research from TIAA-CREF Reinforces the Need to Focus Clients on Reliable Retirement Income,” which shares highlights from their proprietary “2015 Lifetime Income Survey.” Findings from the Survey confirm Americans continue to be challenged to save and to plan, even though security in retirement is a top priority. In addition the paper provides guidance to advisers on where they can uniquely help their clients build a secure “floor” through understanding the value of certain products. By recognizing the uniqueness of each client’s household balance sheet, the effects of market changes coupled with unique shocks to the client’s plan, the paper offers advisers insights to helping their client adjust as needed and build a secure retirement.

To close this issue, we look beyond today’s retirees and consider the future in “Generation X and Y as the New Wealth Holders: The Implications of a Generational Shift in Financial Advising Clientele.” With the current client base spending down assets, how does an adviser grow a practice? Relationships have always been important to retaining clients, and building cross generational relationships with the children of current clients bring new challenges to the adviser. This paper demonstrates the value of figuring out the next generation in order to capture a growing wealth that’s just beginning to show its potential.

There’s much to read in this issue, an issue that not only advances and adds to the body of retirement-planning knowledge but also offers information that financial advisers and others can put into practice in the real world.

As always, Kim McSheridan, our assistant editor, and the RMJ staff and volunteers thank you for supporting the RMJ. Authors please consider submitting papers for consideration in future issues. Members don’t forget to distribute the PDF version of the RMJ to your constituents.

Robert J. Powell, III
Editor & Publisher,


This issue marks a continuation of our best practices journey, providing you with an explicit mapping of the papers in the context of RIIA’s Retirement Management Analyst℠ curriculum framework. This framework is outlined in The Retirement Management Analyst℠ (RMA℠) Designation: Curriculum Book for RMA Candidates (5th Ed.).

It is why this issue opens up with an RMA Update Bulletin, which RMAs received earlier this year. In addition to the Best Practices charts in the RMA Curriculum Book, this Update Bulletin provides 10 practical questions that will help advisers build Retirement Policy Statements (RPS) for their clients.

As you read the Update Bulletin you will find the complete expression of the RMA framework combining the seven chapters with the 10 RPS questions. This guides us in RIIA’s Mission to “Discover the New Realities of Retirement” from our unique perspective of “The View Across the Silos. This framework also provides the structure for our Essential Readings list, which you can find at as well as in this issue.

The Best Practices books, award-winning Retirement Management Journal℠ (RMJ℠) papers and other critical sources are identified and classified in the framework to help you place the papers you read in this issue of the RMJ in the context of what you should know and the process of what you already do for your clients. It also helps us ensure that our choice of RMJ papers and authors provides appropriate balance across the framework.

For those of you who are new to RIIA, the RMA, or the RMJ, it will help you to know that the RMA Curriculum can be summarized in four parts:

  • The Client Diagnostic Kit (Chapters 1, 2, 3)
  • The Retirement Allocations (Chapter 4)
  • The RMA Toolbox (Chapters 5, 6)
  • Practice Management (Chapter 7)

For all the details and how to use the most objective Client Diagnostic Kit and Implementation Toolbox in the industry, read the Curriculum Book for RMA Candidates (5th Ed.) as well as previous issues of the RMJ, which are all available on, providing access to non-members, worldwide.

Of note, RIIA members receive the pdf copy of all RMJ issues for free. If you are not a member, join RIIA today as an individual member or ask your employer to join as an institutional member so that you can take advantage of the free, opt-in institutional membership available to all employees of institutional members.

François Gadenne
Chairman and Executive Director, RIIA


Welcome to the Spring 2014 issue of the Retirement Management Journal℠ (RMJ), a special double issue that features both academic and practitioner peer-reviewed papers.

As you will read, this issue features papers that continue to expand the body of retirement-planning knowledge and, equally if not more importantly, challenge conventional wisdom.

Chief among the contributions is the winner of our third annual Academic Thought Leadership Award – The True Impact of Single Premium Immediate Annuities On Retirement Sustainability: A TotalWealth Perspective co-written byMichael Kitces,MSFS,MTAX, CFP®, CLU, ChFC, RHU, REBC, CASL, a partner
and director of research at Pinnacle Advisory Group and Wade Pfau, Ph.D., CFA, a professor of retirement income at the American College.

Mr. Kitces and Dr. Pfau examine how to finance a particular spending goal, which is an inflation-adjusted amount equal to either 4% or 6% of initial retirement date assets, and how to sustain that income stream for as long as possible in retirement.

In their paper, the authors examine the relative success of static portfolios, stock/single premium income annuity (SPIA) portfolios, and dynamic stock/bond portfolios that match the glide path of a stock/SPIA strategy, in order to separate the impact of the glide path and the impact of mortality credits into their component parts.

Robert J. Powell, III
Editor & Publisher,

Summer 2013 Issue

The Summer 2013 issue of the Retirement Management Journal (RMJ), Vol. 3, No. 2, features the work of the Retirement Income Industry Association’s (RIIA) Research Committee and is now available to members and subscribers.


Led by Elvin Turner, RIIA’s Research Committee Chair – Research Committee members include principals from Depository Trust & Clearing Corporation (DTCC), PricewaterhouseCoopers (PwC), Strategic Business Insights, and Morningstar, to name but a few – continues to break new ground and the papers in this issue – the RMJ’s second-ever Research Committee issue – bear that out.