As participants near retirement, their financial pictures can vary greatly. A more customized approach, that is focused on each participant’s unique retirement spending needs and sources of income can improve retirement outcomes.​

Spending – While some participants rely on DC plan savings to cover all of their essentials or “Needs” in retirement, others may be able to use plan savings on a variety of non-essential items or “Wants”.​

Sources of Income – Some participants may have secure income (like a defined benefit plan) to cover their Needs in retirement, while others with less secure income have less flexibility around how to spend DC plan savings.​

For a more personalized approach, we consider three different participant spending profiles.

Inflation and market drawdowns can shorten the longevity of retirement savings, derailing retirement outcomes. ​

Broad asset class diversification, including allocations to alternative asset classes, can:​

• Shorten the length and dampen the magnitude of market drawdowns​

• Mitigate the risk of inflation​

At PGIM, we believe allocations to alternative asset classes, like those listed below, may not only improve portfolio efficiency, but can make retirement savings last longer, by mitigating the key investment risks faced by participants. ​

• Private real estate​

• Commodities​

• Infrastructure