Capital-intensive withdrawal strategies are obsolete. Modern financial planning demands purpose-driven, efficient solutions.
Morningstar’s recent decision to lower its safe withdrawal rate from 4% to 3.7% isn’t a footnote — it’s a flashing warning light for financial professionals still building retirement income strategies around the portfolio longevity model. While the article “How’s Your Client’s Reliability of Income?” rightfully elevates the importance of consistency in income delivery, it stops short of addressing the deeper, more dangerous issue:
We’re still using accumulation logic to solve an income problem.
This is the mistake many advisors unknowingly make: applying the same capital market principles that build wealth to the very different challenge of distributing wealth reliably over an unknown timeframe.
THE FLAW AT THE CENTER OF TRADITIONAL PLANNING
In the world of accumulation, volatility can be your friend. Through dollar-cost averaging and regular contributions, clients benefit from market fluctuations. But in retirement? That same volatility becomes a corrosive force. I call this dollar-cost-ravaging — where retirees must sell more shares in down markets to meet fixed income needs, irreversibly damaging long-term sustainability.
Retirees using a traditional asset allocation strategy are often forced to overfund their income plans just to maintain a sense of safety. But safety shouldn’t require a 2x capital multiplier. That’s not just inefficient — it’s unacceptable.
ENTER ASSET OPTIMIZATION: A SMARTER, LEANER FRAMEWORK
At CSSCS, we champion Asset Optimization — a planning methodology designed for today’s realities. The objective is simple but powerful:
Determine how little capital is needed to guarantee lifetime income — not how long a portfolio can last.
This isn’t theory. We’ve run the numbers across hundreds of case studies. Clients implementing a properly structured Asset Optimization plan routinely require up to 50% less capital to fully fund retirement income needs.
It’s not just efficient. It’s transformative.
THE THREE PILLARS OF INCOME RELIABILITY
Let’s break this down into the practical tools you can use:
- Social Security Optimization: The 77% Opportunity
Social Security remains the single most powerful income asset clients possess — yet it’s often undervalued or claimed too early. Strategic filing decisions can increase lifetime benefits by at least 24% to 77%, depending on timing.
For example, for someone with a Full Retirement Age (FRA) of 67:
- Filing at 70 instead of 67 boosts income by 24%, minimum.
- Filing at 70 instead of 62 boosts income by at least 77%.
These are not hypothetical projections — they’re contractual differences. Clients don’t need to “hope” the market cooperates to unlock this value. When paired with a coordinated bridge strategy, these deferral gains can help dramatically reduce a plan’s capital requirements — often by hundreds of thousands of dollars.
- Guaranteed Income Products (Yes, Including FIAs)
Despite outdated biases, annuities — when properly selected and structured — deliver contractual guarantees that no market-based investment can match. The key is integration, not isolation. We’re not talking about pushing product. We’re talking about using contractual income to fortify the plan and remove income risk from the market.
If you’re skeptical, this blog might change your mind: Retirement 1.0 Is Obsolete — Time for an Upgrade.
- Asset Segmentation by Purpose
Instead of lumping all assets into one performance-driven pot, divide them by role:
- Income buckets (guaranteed, short-term)
- Growth buckets (market exposure, long-term upside)
- Legacy or liquidity reserves
This segmentation improves clarity, preserves income, and allows growth to play its appropriate role.
NOT JUST FOR “UNDERSAVERS”
There’s a common misconception that these strategies are only for those falling short of their retirement goals. In fact, they’re even more powerful for affluent households — what we sometimes call the “everyday millionaires.”
For those with $1M+ in retirement savings, the ability to carve out just the capital needed to secure income, while allowing the remainder to grow or be earmarked for legacy, is one of the most tax-efficient and emotionally satisfying plans we can build.
One of my favorite examples of this is outlined in DMI’s case study blog: 👉 Time to Update Retirement Thinking
ONE PLAN, TWO PURPOSES
Advisors often ask: “What’s the payoff for using Asset Optimization?” The answer isn’t just a more efficient income plan — it’s freedom. When you minimize the capital required to guarantee income, you don’t just preserve assets… you create new planning capacity.
That capital can now serve multiple goals — from legacy planning to charitable giving, gifting strategies, or simply increasing client confidence and peace of mind.
Your clients’ retirement assets don’t have to choose between income and impact. With the right partners, tools, and process, they can accomplish both.
SHIFT THE QUESTION, SHIFT THE OUTCOME
It’s time we stop asking the outdated question:
“Will this portfolio last 30 years?”
Instead, start asking:
“How little capital do we need to secure guaranteed, inflation-adjusted income for life?”
That simple shift changes everything — for your planning strategy, your clients’ financial well-being, and your advisory value proposition.
WHAT COMES NEXT
The future of retirement income planning isn’t just about more data or more products. It’s about better frameworks and questions. As professionals, we owe it to our clients to offer solutions that provide both certainty and efficiency — not just historical assumptions and best guesses.
If you’re ready to bring the 21st-century approach to your clients…
👉 Contact your DMI Annuity Team member today to explore Asset Optimization strategies and planning tools that help you build stronger retirement outcomes — with less capital, less stress, and far more confidence.
DMI’s annuity specialists are standing by to help you audit existing contracts, identify opportunities, and deliver smarter strategies — fast.
Choose the team member you’d like to connect with below. Each offers personalized support and a simple 15-minute call to review your book of business.
Andy Robertson,
Co-founder and Vice President, Training and Business Development
Founder & President of Capital Indemnity Group & Trusted Resource
As founder and President of Capital Indemnity Group and Trusted Resource, I work daily with some of the top retirement planning professionals around the country. Together, we introduce retiring Americans to the true power of one of the greatest retirement programs in existence today, Social Security. Understanding Social Security's unique ability to combat the erosive effects longevity, inflation, and taxes have on one's retirement capital is the key to building a fortified retirement income plan and minimizing the likelihood their clients will run out of money. With 92% of American households likely to fall short of their retirement savings needs, top retirement planners utilize our knowledge, training, and tools to embrace the complexity of Social Security planning and leverage its ability to salvage middle America's retirement dreams.
