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David Blanchett, PhD, CFA, CFP, is head of retirement research at Prudential Financial and a portfolio manager for PGIM, where he oversees the PGIM RetireWell target date and retirement spending strategies. He previously led retirement research at Morningstar Investment Management and has published more than 100 academic papers on retirement planning.
Blanchett said the most effective step is to save early, save often, and save a meaningful amount, since it's simple and compounds over time.
He said having a plan, and revisiting it, becomes especially important as retirement approaches, since needs and risks shift with age.
He noted that financial advice varies widely in quality, and pointed to credentials like the CFP designation and fiduciary status as signals worth considering.
He observed that traditional defined benefit pensions worked well for employees but are difficult for employers to sustain given today's more mobile workforce. Read more in our history of the shift from pensions to 401(k)s.
He described longevity risk, the risk of a long retirement, as a "multiplier," since it amplifies other risks like inflation and long-term care costs over time.
In research with Michael Finke of The American College, he found that retirees tend to withdraw only about 2% of personal savings annually, well below commonly cited 4-5% guidelines, while spending nearly all of their guaranteed lifetime income, such as Social Security, pensions, and annuities.
What did David Blanchett say is the biggest risk in retirement?
He described longevity risk, the risk of outliving savings, as a "multiplier" because a longer retirement compounds other risks like inflation and long-term care costs.
What did Blanchett's research find about how retirees spend their savings?
His research with Michael Finke found that retired couples withdrew about 2% of personal savings annually, well below commonly cited 4-5% guidelines.
Did the research find a difference in how retirees spend guaranteed income versus personal savings?
Yes. The same research found retirees spent nearly all of their guaranteed lifetime income, such as Social Security, pensions, and annuities, while underspending personal savings.
What did Blanchett say about working with a financial advisor?
He said advisor quality and scope of services vary widely, and pointed to credentials like the CFP designation and fiduciary status as indicators worth considering.
This article summarizes views shared by David Blanchett in this interview and does not constitute financial, tax, or investment advice. Consult a qualified financial professional before making retirement planning decisions.
Disclosures
The information on this page is provided for educational purposes only and is not intended as investment, legal, or tax advice. It is designed solely to illustrate how longevity-linked investment benefits may work under certain assumptions. Actual results will vary. All illustrations, examples, and case studies are hypothetical and are intended to demonstrate potential scenarios — not to predict or guarantee actual outcomes. They do not represent the performance of any individual investor, portfolio, or account.
Key Assumptions Used in the Illustrations
Life expectancy and mortality projections are based on the most recent Social Security Administration (SSA) tables available at the time of simulation.
In the event of death or early withdrawal, hypothetical scenarios assume that investors who exit early, or their estate in the event of death, may receive 75% of the lesser of the initial investment or current market value, plus 1% for each full year the account was active. Case studies assume standardized market growth of 8% annually and do not incorporate unexpected market volatility, inflation, changes in interest rates, or changes in an investor's personal circumstances.
Simulations may assume a 3% annual early withdrawal rate prior to payout or death. All figures shown are net of fees. No forecast, projection, or hypothetical return should be relied upon as a promise or representation of future performance.
Past performance is not indicative of future results. The 8% annual market growth rate used in illustrations is a standardized assumption for modeling purposes only and does not represent the historical or expected performance of any specific investment. Note that early or voluntary withdrawals by other participants can affect fund performance and the size of distributions, and that a higher-than-expected number of participants reaching payout milestones may reduce the per-participant benefit received.
Savvly's Longevity Benefit is not a bank product, not FDIC insured, not insured by any federal government agency, and not insurance; payout amounts are not guaranteed. Investment values may decline..
Savvly's Longevity Benefit may not be suitable for all investors. Eligibility to invest is subject to qualification requirements and not all investors will be eligible. Investors should carefully consider their investment objectives, risk tolerance, time horizon, and financial situation before investing. See savvly.com/disclosures for current eligibility criteria, fees, risks, withdrawal terms, and fund assumptions.
This content is published by Savvly, Inc. Savvly has a financial interest in the products described and this content should not be interpreted as independent financial research or analysis. Investors should carefully evaluate their own circumstances and consult a qualified financial professional before making any investment decision.
