PGIM unveils new retirement spending funds

The asset-allocation solutions are designed to address investors’ varying risk tolerances and retirement income needs.

PGIM, a global investment management business, has expanded its offerings with the introduction of three retirement spending funds.

With its new retirement-focused suite, the investment management subsidiary of Prudential Financial aims to provide US workers nearing or entering retirement with innovative solutions tailored to their unique long-term investment and spending needs.

PGIM, with assets under management exceeding $1.3 trillion, is positioning its new funds as a cornerstone of its commitment to addressing the evolving needs of retirees and near-retirees.

Structured as funds of funds, the new solutions include the PGIM Conservative Retirement Spending Fund, the PGIM Moderate Retirement Spending Fund, and the PGIM Enhanced Retirement Spending Fund.

Each of the funds has the ability to pay dividends monthly, if any, and is crafted to cater to investors’ varying risk tolerances and income requirements, offering a strategic blend of growth and capital preservation.

“An individual’s investment needs and spending goals at or near retirement are entirely unique to their circumstances,” Jeremy Stempien, principal, portfolio manager and strategist at PGIM Quantitative Solutions, said in a statement.

Stempien is playing a key role in running the PGIM retirement spending funds as a co-portfolio manager. He also plays a leading role in managing PGIM’s target-date suite of retirement solutions.

The launch comes at a time when retirement readiness and financial security are at the forefront of many Americans’ concerns.

In one new study from Northwestern Mutual, thousands of US adults surveyed estimated they’d need $1.46 million on average for a comfortable retirement, with younger respondents forecasting closer to $1.6 million.

But advisors interviewed by InvestmentNews say it’s not so simple, arguing that putting a hard dollar target on nest eggs oversimplifies the math of saving for retirement.

“Everyone’s spending in retirement will be different,” said Daniel Lash, partner at VLP Financial Advisors. “By putting a number to it, this can lead to some to think they have enough, when they don’t relative to their spending, and others to feel like they will never be able to retire.”