Category: Retiring article

Cash Management vs. Risk Management Retirement Strategies

By Walter H. Zultowski, Ph.D

The insurance industry’s Society of Actuaries recently completed a survey1 of the public’s perception of their financial risks in retirement, and how they plan to manage them.

In this research, there was one statistic that gave me pause. More than half of today’s pre-retirees (52 percent) are either somewhat or very concerned that their spouse or partner may not be able to maintain their same standard of living after their passing.

When asked about their financial strategies for retirement, it is clear that most pre-retirees approach this task with a “cash management” mindset. That is, they see themselves managing their expenses in retirement so that they can be covered by their level of income.

A plan with this approach can be difficult to manage due to increased expenses from inflation, as well as the variety of unexpected expenses that can arise. Consequently, it is not surprising that many pre-retirees indicate that they plan to continue working into their retirement years in order to keep their level of income at least equal to their level of expenses.


“A majority of pre-retirees express concern that their spouse or partner would not be able to maintain their standard of living in the event of their passing.”


Interestingly, this research also highlights that pre-retirees’ expectations about working during their retirement don’t match reality:

  • Overall, 53 percent of pre-retirees said that they expect to retire at age 65 or older, with another 15 percent of pre-retirees never expecting to exit the workforce.1
  • However, when surveying current retirees, 52 percent said that they retired prior to age 601. This was due to a variety of reasons, like health concerns, the unavailability of reduced working hours and the inability to find work with a new employer.

While this reality can damage a “cash management” approach to retirement, the unexpected passing of a primary wage earner can completely shatter this strategy. Therefore, it’s not surprising that a majority of pre-retirees express concern that their spouse or partner would not be able to maintain their standard of living in the event of their passing.

With a “risk management” approach to retirement, the loss of planned future income during retirement due to premature passing is viewed as a risk that can be insured against. To maximize this “risk management” approach, both spouses or partners should consider having an individually owned life insurance policy.

Life insurance can help ensure a comfortable standard of living during retirement for the surviving spouse or partner in the event of a premature passing of one member of the couple.

Commentary on Society of Actuaries study*


Meet Walter H. Zultowski, Ph.D.

Walt is a respected market researcher and public speaker with more than 30 years of experience in life insurance and economic trends affecting Americans.


  • Society of Actuaries. 2013. Retirement Survey Report Key Findings and Issues: Understanding and Managing the Risks of Retirement.

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