In this Nasdaq LIVE interview, Colin Lake, President and CEO of Delaware Life Marketing, unveils its L.I.V.E. framework, a new way to reframe how retirees and advisors think about retirement risk through four key dimensions: Longevity, Inflation, Volatility, and Emotion.
The conversation begins with Longevity risk: people are living significantly longer than their ancestors did. That’s good news – but it also means retirement can last 20, 30, or even more years, creating a very real risk of outliving retirement savings. The discussion underscores the need for strategies built to generate sustainable income over a much longer time horizon.
Next, the focus turns to Inflation risk is highlighted next. Even a seemingly modest 3% inflation rate can substantially erode purchasing power over the course of retirement. The interview notes that everyday essentials, such as groceries, have seen sharp price increases over just a few years, underscoring how sustained inflation can threaten a retiree’s standard of living if income doesn’t keep pace.
Colin then explores Volatility risk through the lens of market downturns and bear markets, especially in the early years of retirement. Because retirees are drawing down their portfolios, negative returns in the first few years can dramatically shorten the duration of their assets. The discussion emphasizes the importance of diversification, balancing growth-oriented investments with more conservative assets and strategies that mitigate this risk.
The interview leans into Emotion risk, addressing the behavioral side of investing and explaining how fear, greed, and market headlines, compounded with fears of inflation and outliving savings, can lead investors to buy high, sell low, and abandon long-term plans at precisely the wrong times. This segment highlights that helping clients manage these emotional responses is just as important as picking the “right” investments.
Colin shares how L.I.V.E. highlights several planning approaches to address these risks: constructing diversified portfolios that factor in inflation and volatility, considering lifetime income solutions and structured withdrawal strategies to support longevity, stress-testing plans against a range of market and lifespan scenarios, and offering ongoing education and coaching to keep clients on track through changing market conditions.
To learn more about L.I.V.E. and access tools and resources designed to make important conversations about retirement risks easier, clearer, and more impactful, financial professionals can visit the L.I.V.E. site at delawarelife.com/live/home.