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RightCapital Launches Dynamic Retirement Spending Strategies
Dynamic spending strategies allow retirement expenses to fluctuate based on actual portfolio performance and customized strategy parameters.
FREMONT, CA: RightCapital, a next-generation financial planning software, announced the launch of dynamic retirement spending strategies within its technology platform. The most commonly used approach in financial planning is inflation-adjusted retirement spending, where retirement expenses increase each year relative to a standard inflation rate. This approach is less than optimal because it overlooks important factors that can substantially impact a client's spending in retirement.
Dynamic retirement spending strategies allow advisors and clients to model various spending outcomes based on portfolio performance in retirement. Dynamic spending strategies allow retirement expenses to fluctuate based on actual portfolio performance and customized strategy parameters. The two dynamic spending strategies introduced in this product release are commonly referred to as guardrail and floor and ceiling.
"The industry has been using a rather simple retirement expense approach in the financial planning process for many years. The ability to offer multiple options for retirement spending within our comprehensive planning tool is a significant step forward," said Shuang Chen, CEO of RightCapital. "We are excited to provide advisors with the ability to incorporate dynamic spending strategies into their financial planning process."
RightCapital's advanced options also support staged retirement spending and retirement spending smile strategies. Staged spending allows advisors to manage spending levels by age, allowing for increased spending in the first few years of retirement, slowing down over time as the retiree ages. Retirement spending smile is when retirement spending varies in a real or nominal dollar amount based on fluctuations in healthcare costs during retirement. Other standalone retirement spending tools offer similar capabilities, but RightCapital is the first comprehensive financial planning software to provide dynamic retirement spending strategies for its users. Designed with the advisor in mind, this product feature brings all areas of the financial planning process into one powerful platform.