Choices, compromises, and certainty in retirement

Research has found that retirement investors care about more than just expected returns and volatility. The industry, however, lacks a common way to describe these preferences, along with the methods to identify the trade-offs needed to meet financial goals. Retirement investors demand more liquidity and are less risk averse than expected, can tolerate some volatility, and are willing to sacrifice some of their income for a guaranteed lifelong payment. T. Rowe Price’s five-dimensional (5D) framework measures supply and demand in the retirement income landscape. It highlights the preferences...