The Coordinated Retirement Income Strategy (CRIS) is presented as a potential solution for Americans concerned about their ability to achieve a secure retirement. According to the National Institute on Retirement Security’s 2018 Retirement Security Roadmap, 82% of Americans share these concerns. CRIS is designed to contractually solve the problems of market volatility, lost opportunity costs, and uncertain retirement income that many Americans face. CRIS is an asset allocation and coordination strategy that can reduce market risk, income tax exposure, and protect social security benefits, among other benefits.
Traditional planning approaches involve taking at-risk money and distributing it based on the Monte Carlo Principle. In contrast, CRIS allows for a 20-100% increase in future retirement income while reducing market risk and protecting against long-term care expense depletion. In the example given, taking a 4% withdrawal rate of funds from a 401(k) account may be sustained for 30 years of retirement cash flow. However, with CRIS, a 9% annual distribution rate for 15 years from the initial at-risk money would generate $45,000 in annual income, leaving at-work money to sustain an individual for the additional 15 years.
To learn more about how CRIS may fit into your personal financial plan, contact your Turtle Creek Financial Group field analyst for a deeper discussion.
*Monte Carlo Principle
An actuarial algorithm designed to measure probabilities and degrees of certainty of outcomes. This principle was utilized by Los Alamos scientists when developing the atomic bomb. The Monte Carlo Principle was first applied to retirement planning by Randy Spiegelman, Senior Vice President of Financial Planning at the Charles Schwab Center for Financial Research. Mr. Spiegelman concluded that there is a 90% probability that a 4% withdrawal rate of funds may be sustained for 30 years of retirement cash flow.