Perspectives: Why Do RIIA’s Retirement Allocations Start With Upside Instead of Flooring?

An advisor recently asked: If RIIA®’s body of knowledge is all about flooring as some seem to believe, why do RIIA’s Retirement Allocations – Upside/Floor/Longevity/Reserves (U/F/L/R) – start with the Upside portfolio instead of the Floor portfolio?

More than ten years ago, when we started to define our concepts and the words that go with them – that you can find documented in our Glossary – we experimented with various combinations. We did notice that Floor/Longevity/Upside/Reserves (F/L/U/R) would make a great mnemonic for Floor. We also noticed that it would lead people to systematically misunderstand the fundamentals of the Retirement Allocations: The Retirement Allocations cover the full range of retirement solutions, including flooring but not even primarily – let alone exclusively – flooring.

RIIA’s body of knowledge is based on its unique View Across the Silos℠ perspective. The Procedural Prudence Map, a summary of the RMA curriculum, reflects the completeness and comprehensiveness that derive from this View Across the Silos. The Procedural Prudence map is a representation of the entire retirement territory. It is based on RIIA’s mission to “discover, validate and teach the new realities of retirement.”

RIIA’s Retirement Allocations start with the Upside Portfolio because Upside is what goal-based planning (using the Household Balance Sheet View to derive Risk Capacity) calculates first.

RIIA’s Retirement Allocations start with the Upside Portfolio because it is what investment-based advisors know and use as their starting point: traditional asset allocations such as 60/30/10.

There are other reasons, but to learn them you really should take the next approved course of study at Salem State University.

So in the end, U/F/L/R became the combination that best communicates the extent and the depth of RIIA’s Retirement Allocations.



Francois Gadenne
Co-Founder, Chairman & Executive Director

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