Retire With Purpose - The Retirement Podcast

499: Retirement Income Strategies to Quell Inflation Fears and Spend Comfortably with David Blanchett

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May 12, 2025

David Blanchett, Managing Director at PGIM DC Solutions and a leading voice in retirement income planning, returns with fresh insights. He tackles the misunderstood 'retirement crisis,' advocating for a view of it as a 'challenge' instead. The conversation dives into adapting the 4% withdrawal rule amidst changing economic conditions, emphasizing personalized retirement strategies. Blanchett also highlights the transformative role of guaranteed income annuities and the essential need for realistic spending patterns in an inflationary environment.

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INSIGHT

Retirement: Challenge Not Crisis

David Blanchett prefers the term "challenge" over "crisis" for retirement because retirees are generally content and financially stable.
The U.S. has a robust retirement system, and the "retirement crisis" narrative doesn't fully reflect reality.

INSIGHT

Retirement Spending Patterns Revealed

Retirees typically do not increase their spending by full inflation rates; they tend to spend less over time in real dollars.
This allows more spending early in retirement when it can be better enjoyed.

ADVICE

Diversify for Inflation Protection

Build a diversified retirement portfolio with explicit inflation hedges like TIPS, commodities, and real estate.
Do not rely solely on equities or TIPS; balance risk and inflation protection appropriately.

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Today, I'm thrilled to welcome David Blanchett back to the podcast. David is the Managing Director and Head of Retirement Research at PGIM DC Solutions and one of the most respected voices in retirement income planning today. You've likely come across his work in Morningstar, Kiplinger, and our Weekend Reading series—and for good reason. His research has earned accolades from nearly every major financial planning organization.

In our conversation, we picked up where we left off back in Episode 55 with David's groundbreaking research on retirement spending patterns and adapting it to today's environment of elevated interest rates and persistent inflation. From challenging the idea of a "retirement crisis" that is making headlines everywhere to rethinking the 4% retirement income rule, David helps us distill the data and build income strategies grounded in behavioral and financial realities.

In our conversation, we discuss the value and confidence that guaranteed lifetime income annuities provide retirees and how inflation concerns are impacting spending patterns. If you're planning your retirement or considering an adjustment to your current plan, this episode is packed with insights to help you spend your hard-earned dollars with confidence and design a secure and fulfilling retirement.

In this podcast interview, you'll learn:

Why "retirement crisis" is an overused headline—and why "challenge" is the better word.
What David's research reveals about how real retirees spend—and why most don't adjust spending for inflation as expected.
Why a 5% withdrawal rate may be more appropriate than 4% in today's interest rate environment.
The behavioral power of guaranteed income—and how it gives retirees the freedom to actually enjoy their savings.
How to build inflation hedges into your portfolio using tools like TIPS, annuities, and real assets.

Show Notes: Howardbailey.com/499

📧 WEEKEND READING FOR RETIREES: Receive CFP® insight on 4 hand-picked financial articles delivered straight to your Inbox each Friday: https://bit.ly/3OEdGgu

📅 SCHEDULE YOUR PERSONAL FINANCIAL REVIEW: Book a 15-minute call with Howard Bailey Financial to see how the topics discussed here apply to your individual situation: https://bit.ly/3z5mXIw

ABOUT HOWARD BAILEY FINANCIAL: Our mission is to help others gain clarity in purpose and elevate meaning in their lives through personal and practical financial strategies. Our Retire With Purpose™ Framework starts with establishing your unique financial philosophy — the true meaning and purpose for your money in retirement. Through continued education, one-on-one meetings, and a comprehensive team planning approach, we have helped retirees across the country secure their financial futures. And while we can't work with everyone, our goal is to provide value to everyone we meet. Our team of advisors and support specialists strive to deliver the very best experience in pre-retirement and retirement planning. Learn more about our process here: https://howardbailey.com/our-process