The white paper compares the benefits and shortfalls of the bucket strategy—which groups retirement assets by the time horizon in which they will be used—to a strategy of periodic withdrawals from an age-appropriate portfolio.
The analysis looks at the complexity of each strategy; evaluates psychological and economic benefits of each approach; and explains why each strategy offers potential benefits and shortfalls, with focus on how certain funds reallocate over time. The benefits and shortfalls of each strategy are summarized in a chart.
“There is no one-size-fits-all approach to retirement income. Every retiree’s situation is different but evaluating to determine which could be the right strategy is complex and time consuming,” said Jerry Patterson, senior vice president of retirement and investor services. “Financial professionals can play a critical role during the transition to retirement. This new analysis offers them an easier way to evaluate the pros and cons of two common retirement income distribution methods.”
To view the white paper in its entirety, visit https://secure02.principal.com/publicvsupply/GetFile?fm=PQ10855&ty=VOP&EXT=.VOP.