Leveraging Retirement Management Advisor^® (RMA^®) Certification in the Age of Longevity

In today’s world, retirees are living longer than ever before. Life expectancies, especially for higher-income individuals, are stretching well into the 80s, 90s, and even beyond. In fact, this type of longevity is no longer considered unusual — but the transformational effect it is having on professional retirement planning is profound. The days of the stodgy, one-size-fits-all retirement advisor are over.

Today’s retirees need help creating dynamic, customized, and complex retirement plans. That means they need advisors who are motivated, forward-thinking, empathetic, and deeply knowledgeable in retirement income strategies. Retirement advisors need to create plans optimized for each client’s life-expectancy. They must balance income sustainability against unexpected healthcare costs, protect against inflation, and ensure resilience against market volatility. Given the trends in life expectancy, they must also be experts at factoring in longevity risk (the possibility that individuals will live even longer than expected). This means the advisor must execute a difficult task. They have to account for something that is uncertain and unknowable: How long will a client’s preferred lifestyle need to be sustained?

The RMA Advantage: Equipping Advisors for the Challenge

This is where the Retirement Management Advisor (RMA) certification comes in. It’s not just another run-of-the-mill retirement credential — it’s a gateway to becoming a sophisticated, in-demand professional. One that is fully equipped to master the modern challenges of longevity, behavioral finance, and the dynamic income strategies necessary for success in today’s retirement environment. Are you ready to transform your practice and successfully lead your clients through the most long lasting, financially complex retirements in history?

RMA certification represents the highest standard of excellence in retirement planning. The curriculum, revised in 2023, offers a multidisciplinary approach to learning, while covering topics such as client discovery, risk management, retirement portfolio allocations, and retirement policy statements. The RMA course is available on-demand through the Investments & Wealth Institute and as a hybrid version through the Chicago Booth School of Business.

How Does RMA Help Address Factors of Longevity Risk?

We typically celebrate longer lifespans as a triumph of modern medicine and lifestyle improvements. But the gift of longevity presents a unique challenge to the retirement planning process. Specifically, the real possibility of exhausting one's savings before death, which could lead to financial hardship in later years. If not addressed expertly and well in advance, even seemingly well-to-do retirees can outlive their financial resources. In fact, along with worries about health, running out of financial resources is one of the greatest popular fears around retirement.

Indeed, one major input to longevity risk are healthcare expenses, which tend to outpace even general inflation. While Medicare may cover many health expenses, it doesn't cover everything. Retirees often need to budget for out-of-pocket costs, supplemental insurance, and prescription drugs. Moreover, an individual’s health status can change rapidly in retirement years, leading to substantial and unexpected healthcare spending. This is especially true for acute events like heart attacks or strokes, or the onset of chronic conditions, such as hypertension or pulmonary diseases. The unfortunate reality is that nearly 95% of older adults have at least one chronic condition, and about 80% have two or more.

When it comes to costs, Fidelity's 2024 Retiree Health Care Cost Estimate projects that a 65-year-old retiring today could spend an average of $165,000 on health care and medical expenses throughout their retirement years. The average American, however, estimates they will need to spend only $75,000. This is more than a 100% difference between expectations and reality.  Fortunately, advisors trained under the RMA certification framework are prepared to incorporate realistic healthcare cost projections into the planning process, helping to ensure sufficient coverage for extended medical needs.

Another major aspect of longevity risk in retirement is inflation, which erodes the purchasing power of retirement savings over time. This means retirees may need more money than initially anticipated to maintain their standard of living, especially if they experience an unusually long retirement period. Furthermore, many retirees rely on fixed income sources, such as pensions or annuities, that may not adjust for inflation. This can also lead to a substantial decline in purchasing power over time.

RMA certified advisors, however, know how to incorporate inflation protection into retirement portfolios. One way they can do this is by utilizing inflation-adjusted instruments such as Treasury Inflation-Protected Securities (TIPS). Another is to include real asset classes in portfolios that typically offer hedges against inflation, such as real estate and commodities. RMA professionals are also trained to help clients optimize the timing of Social Security benefits, which are inflation-adjusted, thus enhancing income sustainability over a long retirement. They can also evaluate the role of inflation-adjusted annuities where applicable, providing guidance on the trade-offs between immediate payouts and long-term purchasing power protection​​.

Emotional Security Matters Too

Another concerning trend that expert retirement management specialists will need respond to — especially among the huge wave of retiring baby boomers — is the gap between exuberant retirement expectations and their more sobering financial realities. Retirees often face anxiety and fear when they realize they won’t have the resources and experiences they once imagined. The RMA certification process incorporates behavioral finance techniques, which are essential for helping clients emotionally adjust to new realities.

Through careful conversations, and the co-creation of clear, customized retirement policy statements (RPS) outlining specific goals, income strategies, and spending limits, RMA certified professionals can provide clients with the secure feelings that come with clarity and structure. This codified framework reduces feelings of uncertainty and helps retirees shift their focus to supporting their core needs (such as housing, healthcare, and essential expenses), while helping them maintain their most cherished lifestyle choices, such as staying socially active or spending time with family​​.

The Rise of the Retirement Management Rockstar

The age of longevity is upon us and retirement management advisors are standing on the brink of an extraordinary evolution. A field once dominated by cookie-cutter advice and static retirement plans has evolved into a sophisticated discipline — requiring deep expertise, empathy, and cutting-edge strategies. The RMA certification marks a new breed of financial advisors, redefining what it means to guide clients through the complexities of retirement.

In many ways, RMA certified advisors really are the new rock stars of financial advising. Why? Because they possess the nuanced, multidisciplinary knowledge that today’s retirees urgently need. Their expertise spans far beyond simple asset allocation. They are true masters of longevity risk, behavioral finance, and dynamic income strategies. They’re not just number-crunchers. Rather, RMA professionals are lifestyle architects, helping clients navigate one of the most emotionally and financially complex transitions of their lives, ensuring clients don’t just survive retirement—they thrive in it.

Just as rock stars resonate because they connect deeply with their audience, RMA certified advisors stand out because they listen, understand, and respond to the personal and financial concerns of their clients. In the age of longevity, retirement will last longer, be more complex, and require more careful management than ever before. As more and more baby boomers enter retirement, it’s this combination of technical mastery and personal empathy that will make RMA certified professionals some of the most trusted and sought-after advisors in the financial world.

If you are interested in leveraging the RMA Certification to supercharge your advisory practice, please register and join us for the next RMA Certification Intro Webinar on October 9, 2024 at 11am EST.

• Learn about the RMA curriculum and its unique focus on building custom retirement income plans

• Understand the certification process and requirements

• Gain insights on flexible course options so you can choose the format best suited for your busy schedule

• Hear how you can achieve your RMA certification within 6 months

• Get answers to your questions in a Q&A session with our experts