With the decline in defined benefit plans and growth of defined contribution retirement plans around the world, workers increasingly face the daunting task of managing the drawdown of their retirement plan assets during retirement. Many options have been developed to help retirement plan participants achieve good outcomes in the accumulation phase, yet employers, financial service providers, and policymakers can do more to assist them in the decumulation phase.
Richard Fullmer of Nuovalo and John Turner of the Pension Policy Center write that robo tontines, a longevity risk pooling solution that would be provided by robo advisors, represent a natural evolution in the retirement income market for both supply and demand reasons. Robo advisors are skilled in developing and managing financial products (supply), and they have clients who need help with the drawdown phase of their retirement investments (demand).
Read the full article at the RetireSecure blog of the University of Pennsylvania's Wharton Pension Research Council.