Planning for Spending Volatility in Retirement
Retirees are likely to experience both increases and decreases in spending levels, i.e., volatility or fluctuations, during their retirement years. By planning for and being prepared to adjust to such volatility in spending, retirees can increase their odds of success in retirement.
As the defined contribution retirement savings system matures and emphasis slowly shifts from the accumulation phase to the spending phase, the next big problem for the retirement industry to solve is retirement income. To design successful retirement income solutions, providers need a better understanding of spending patterns during retirement.