PLANSPONSOR - October-November 2022 - 27

INVESTMENTS | FIXED INCOME
Barry Mandinach, executive vice president
and head of distribution at wealth
manager Virtus Investment Partners in
Hartford, Connecticut. " People tend to
think they should maintain a conservative
portfolio position in retirement and
live off bond income or keep a lot in cash.
But that doesn't work if you're living 20
to 30 years in retirement. It doesn't work
in high-inflation environments. You're
just going to go broke safely. "
Mandinach notes that retirement has
changed, but the way many retirement
plans are set up has not. In the past, retirement
planning has meant saving for an
additional 10 or 15 years after retirement,
not 20 or 30. Most people are still saving
as if they had 10 to 15 years to plan for,
which is where a conservative portfolio
posture gets its popularity. However, in
the current environment, there are flaws
in that strategy beyond just longevity risk.
" If you're in a traditional bond allocation, "
Mandinach says, " You're taking
on a lot of duration risk right now in
Treasurys. We're talking to clients about
diversification. That is going to mean
taking an actively managed approach to
fixed income and looking at risk assets
such as high yield or emerging markets
to generate return. If you're looking at
your retirement income, you need to
be thinking more about what happens
in 2032 than in 2022, which means
embracing a bit of the volatility and taking
the risks that you're going to get paid for. "
In practical terms, investors who are
focused on income will need to reconsider
their portfolio allocation-but that may
not be all that bad or all that scary. Rising
rates mean that investors might start
seeing a higher return on some of their
cash positions than they have in several
years. Fixed income is also providing
higher returns than it has in the past but
with some caveats. " New money going
into fixed income is going to do well right
now, " Mandinach says. " If you're already
allocated, then you want to look at what
you can do alongside that to improve
expected return. "
Sue Walton, senior retirement strategist
at Capital Group in Chicago agrees.
" What we're talking to folks about right
now is finding balance, " she says. " The
challenge for many people is that they're
seeing pockets of return, but if you weigh
that against what's being eroded by inflation,
the end result is less than people
expect. So you have to step back and look
at the whole picture. Does someone need
income out of their investment accounts
right now? Are there other areas such as
Social Security they can draw from? What
does the picture look like over the next two
to three years? We're working with people
on how to manage short-term needs while
also being mindful of long-term capital
preservation and investment returns. "
Walton adds that, for individuals who
are already in target-date funds,
those
funds tend to be actively managed which
PLANSPONSOR.COM October - November 2022 27
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PLANSPONSOR - October-November 2022

Table of Contents for the Digital Edition of PLANSPONSOR - October-November 2022

INSIGHTS
INDUSTRY ANALYSIS
RULES & REGULATIONS
UPFRONT
Deep Dive
Managing Volatility
New Solutions
Participant ESG Demands
Good Practices
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - October-November 2022 - Cover1
PLANSPONSOR - October-November 2022 - Cover2
PLANSPONSOR - October-November 2022 - 1
PLANSPONSOR - October-November 2022 - INSIGHTS
PLANSPONSOR - October-November 2022 - 3
PLANSPONSOR - October-November 2022 - RULES & REGULATIONS
PLANSPONSOR - October-November 2022 - 5
PLANSPONSOR - October-November 2022 - 6
PLANSPONSOR - October-November 2022 - 7
PLANSPONSOR - October-November 2022 - 8
PLANSPONSOR - October-November 2022 - 9
PLANSPONSOR - October-November 2022 - UPFRONT
PLANSPONSOR - October-November 2022 - 11
PLANSPONSOR - October-November 2022 - 12
PLANSPONSOR - October-November 2022 - 13
PLANSPONSOR - October-November 2022 - 14
PLANSPONSOR - October-November 2022 - 15
PLANSPONSOR - October-November 2022 - Deep Dive
PLANSPONSOR - October-November 2022 - 17
PLANSPONSOR - October-November 2022 - 18
PLANSPONSOR - October-November 2022 - 19
PLANSPONSOR - October-November 2022 - 20
PLANSPONSOR - October-November 2022 - 21
PLANSPONSOR - October-November 2022 - 22
PLANSPONSOR - October-November 2022 - 23
PLANSPONSOR - October-November 2022 - 24
PLANSPONSOR - October-November 2022 - 25
PLANSPONSOR - October-November 2022 - Managing Volatility
PLANSPONSOR - October-November 2022 - 27
PLANSPONSOR - October-November 2022 - 28
PLANSPONSOR - October-November 2022 - 29
PLANSPONSOR - October-November 2022 - New Solutions
PLANSPONSOR - October-November 2022 - 31
PLANSPONSOR - October-November 2022 - 32
PLANSPONSOR - October-November 2022 - 33
PLANSPONSOR - October-November 2022 - Participant ESG Demands
PLANSPONSOR - October-November 2022 - 35
PLANSPONSOR - October-November 2022 - Good Practices
PLANSPONSOR - October-November 2022 - 37
PLANSPONSOR - October-November 2022 - FIDUCIARY FORUM
PLANSPONSOR - October-November 2022 - INSIDE ANGLE
PLANSPONSOR - October-November 2022 - PLAN PROFILE
PLANSPONSOR - October-November 2022 - Cover3
PLANSPONSOR - October-November 2022 - Cover4
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