The interest-rate environment has changed considerably from just a few years ago. The 10-year Treasury yield has moved from historically low levels in 2020 and 2021 to a substantially higher range, changing the income potential of fixed-income assets and some of the assumptions underlying retirement income strategies.

For clients approaching or living in retirement, strategies developed during the low-rate environment may no longer reflect today’s fixed-income landscape. Higher yields can affect the role fixed-income assets play in generating income, the amount of portfolio withdrawals needed to support spending, and the trade-offs involved in allocating assets across a retirement strategy.

Revisiting assumptions established several years ago can uncover opportunities to reposition the retirement income strategy for today’s environment. Modeling current yields alongside withdrawal needs and existing holdings can help identify where fixed income may play a different role than originally planned and whether other elements of the strategy should adjust in response.