PFP2123. Estimating the End of Retirement - American Institute of CPAs

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The length of retirement is one of the most important assumptions in a financial plan; therefore, care should be taken that is estimated as accurately as possible. This presentation will explore a variety of topics related to estimating “the end” of retirement, including a review of life expectancy and its drivers, the accuracy of subjective mortality estimates, the actual assumptions used by financial advisors in financial plans, as well as model that can be used to approximate a reasonable retirement period that considers personalized mortality and the probability of success.

Learning Objectives:

Recognize how accurate subjective life expectancy estimates are, what objective factors actually matter, and what people tend to get wrong

Identify the implications associated with not considering personalized mortality factors, and the extent financial advisors currently consider them

Discuss how to appropriately estimate the length of retirement for a financial plan assuming the outcome metric is the probability of success and retirement is assumed to last a fixed period

Speaker(s):

David
Blanchett,
PhD, CFA, CFP,
Head of Retirement Research,
PGIM