With the decline of traditional pensions, many older workers and retirees urgently need to decide how to make their retirement generate income that lasts for the rest of their lives. With retirements that can last 20 to 30 years or more, this is indeed a daunting challenge for those fortunate enough to have significant savings by the time they retire.

To address this challenge, different thinking and new language is needed by individuals, retirement plan sponsors, advisers and financial institutions to transition from a mindset of accumulating assets for retirement to a mindset of generating income in retirement. One way to help with this mindset transition is to apply portfolio concepts that have been successfully used to accumulate assets to help retirees develop a portfolio of retirement income. The portfolio approach to retirement income is the subject of a recent collaboration between the Stanford Center on Longevity (SCL) and the Society of Actuaries (SOA).